Advisers want a clear bright line established between professional financial advisers and less qualified advisers allowed to dish out advice on behalf of super funds, Sarah Abood, CEO of the Financial Advice Association told an audience in Hobart this morning.
While adviser views are shifting around the potential benefits and challenges of what some are referring to as ‘baby advisers’, according to Abood, there are concerns the latter could provide members with the wrong advice and impact the credibility of the industry.
Referring to the expanded role for super funds to be able to dish out financial advice as part of the Quality of Advice Review, Abood said members of the FAAA are yet to agree on whether the prospect of a new class of adviser, known as a ‘qualified adviser’ could impact hard-won reputations and ultimately trip up the broader industry.
Opening the second day of the Boutique Financial Planners 2024 conference in Hobart on Friday morning, Abood told a room of around 60 members that many are contemplating whether the planned change to allow less qualified advisers into the industry to provide advice could present an opportunity to incorporate less qualified advisers in their own businesses.
Ensuring the public clearly understands the two classes of advisers will be critical. “We all know that there’s no such thing as a free lunch in this world, someone always pays,” she said.
“Advisers are worried that the hard-won gains we’ve made over the last five years will be undermined because people won’t understand that this is different advice than they would get from a qualified adviser.”
Abood assured the audience that she was working hard to ensure the QAR reforms are finalised, revealing that she hopes to see draft legislation around June. “The main focus for us right now is engaging with Treasury and the minister’s office to make sure we can land this regulation in the right place,” Abood said.
“There’s a lot in there that we need to get through parliament. If these items don’t make it through mid-year, we could be waiting a year longer before it’s revisited.”
Jones introduced the qualified adviser moniker when announcing the full government response the Quality of Advice Review towards the end of last year, dubbed the Delivering Better Financial Outcomes package.
The term drew criticism from the industry who felt it undermined the work put in by advisers to maintain a level of qualification higher than what would be required of so-called “qualified advisers”, as well as the ambiguity it could create to consumers.
Jones has re-buffed the concerns, telling an audience of super fund chairs at Chair Forum, hosted by Professional Planner sister publication Investment Magazine, the name will likely be changed.
“We’ve set out a framework, [there’s] a bit of excitement amongst the adviser profession around nomenclature – if that’s the biggest problem we’ve got then it’ll be pretty easy to fix,” Jones said.
“I think the framework is right: a bigger role for funds, ensuring that we’ve regulated appropriately for risks.”
But long before the controversial title was announced by Jones, the profession had raised concerns about whether qualified advisers would operate on a level playing field – specifically would the scope of advice they would be allowed to offer be appropriate for the lower level of education they were required to undertake.
The government has also yet to announce the specific level of education qualified advisers will be required to have.
