Anne Fuchs (left) and Keith Cullen

Common ground never seems to be abundant, but the Professional Planner Advice Policy Summit aims to bring together the most influential voices in financial advice to drive policy consensus forward for the profession.

WT Financial Group managing director Keith Cullen will be speaking on the opening panel of the summit, which will be held at Canberra’s Old Parliament House on 10-11 February.

Cullen says advisers need to start taking more responsibility for advocating for themselves and their clients and not assume the industry associations such as the Financial Advice Association Australia will do it for them.

“Too often the profession has left it to their industry associations to do the heavy lifting, whereas what is really required is advisers need to personally accept some responsibility for getting involved in advocating,” Cullen tells Professional Planner, less than four weeks out from the event.

Cullen sits on the board of the Financial Services Council, along with Entireti CEO and managing director Neil Younger, and actively advocates for the advice profession via political avenues.

He emphasises the importance of improving the education pathway to attract new advisers. “It’s the absolute number one priority,” he says.

Cullen expresses frustration about the consequences of the “professionalisation of the industry” on the education pathway for new advisers and how the limited scope of what constitutes a relevant degree has “created a supply disaster for the profession”.

“What a financial adviser needs is a commerce, finance or economics degree and then they need some vocational components within that,” he says.

“I get sick to death of hearing people talk about wanting to improve access and affordability of advice and going on these wild goose chases of creating new classes of advisers.”

Bridging shared beliefs

Joining Cullen on the opening session will be Australian Retirement Trust executive general manager advocacy and impact Anne Fuchs.

Fuchs says the advice “ecosystem” can find common ground when advocating for the industry to the government and how the sector should prioritise unity.

She says there has been great consensus on certain aspects including the modernised Best Interest Duty and making it easier for advice fees to be paid, despite disagreements on other matters.

“My job is to find the common ground and alignment because we all know that, in life, you’re not going to agree with everyone on everything,” Fuchs says.

“If as a sector, if we focused on what we agreed on and spoke less about what we don’t agree on, we would actually advance the greater good in a much more material way.”

She describes the industry as an “ecosystem” where everyone plays a different role in servicing clients.

“My ambition is to really create that sense of unity around…understanding where we all sit in the ecosystem.”

In her new role as executive general manager advocacy and impact, she aims to work towards an industry not in competition with each other but working together to find common ground and work together.

“I think there’s an opportunity for us to really have a strong sense of cooperation,” Fuchs says. “Because the advice ecosystem, I don’t see there being competition.”

Lines in the sand

One of the main differences between industry funds and advice licensees is their view of the new class of adviser, introduced in Tranche 2 of the Delivering Better Financial Outcomes legislation.

Fuchs explains that ART supports the implementation of a new class of adviser, which the government revealed will only be able to give advice on APRA-regulated entities, because it will provide greater access to retirement support, particularly for members who only need simple advice.

“Current constraints within general advice can result in a poor member experience where simple needs result in members waiting for an advice appointment when it could be handled by a [representative] guiding a member through a digital advice journey to answer the member’s question,” Fuchs says.

As a super fund, ART believes guiding members through digital advice – not “freestyling” – will tangibly improve member experience and advice accessibility. Additionally, the new class of adviser can create a new pathway to becoming a professional adviser.

Fuchs says this reform has come about as “as a result of everyone getting around the table and having really good, frank conversations with good intent”.

On the other hand, and despite licensees getting access to the new class of adviser, Cullen says the implementation of a new class of adviser is “completely unnecessary” and only benefits super funds.

“It was always pointless and it remains so,” Cullen says.

“All it is a free kick to the industry super funds, who are cashed up to hire an army of backpackers to flog their retirement income products and to run a defensive action to stop the outflows out of their funds.”

He says he objects to the new class of adviser because providing a professional opinion should be the “exclusive domain” of a degree qualified adviser.

“We’re all for the insurers being able to give general advice to their policy holders,” Cullen says.

“They should be able to help them, and we don’t see any problem with that. In fact, we actively encourage it, but it must stop short of a recommendation or professional opinion.

“To dilute the education standards and allow those people to provide any form of actual recommendation or professional opinion is to undo 10 years’ worth of work that’s been done in this profession.”

One of the major hold-ups to getting the first tranche of DBFO legislation passed was disagreement over the wording of the bill which critics argued would require super funds to manually check every Statement of Advice, although this had been disputed by the government, ASIC and super fund regulatory experts.

However, critics argued it was unworkable and risked advisers not being compensated.

Fuchs considers the original wording to have been “fairly non contentious”, but Cullen says “there was no alignment between [licensees] and the industry funds” on the matter.

Despite initial frustrations – WT described an earlier drafting of the DBFO bill as straining the ‘collegiate relationships’ between the advice and super sectors – Cullen considers the final outcome in the 99FA debacle to be a win for the industry.

“I think we could have had a better outcome, but it was a lot better than where it was headed,” Cullen says.

Celebrating the victories

While Fuchs and Cullen have taken different stances on these elements of DBFO, they both agree that there has been some wins for the industry in recent years.

Fuchs considers an increased knowledge about intrafund advice and the needs of mass retirees thanks to DBFO a win for the industry.

“Realistically, not every Australian has needs where going to pay a professional adviser for full comp advice is needed, and super funds can fulfil that need which is a great outcome for the country because we would expect more Australians to make better decisions at Retirement from seeking simple advice from their fund,” Fuchs says.

However, she recognises that there is still clarity needed about what intrafund advice will look like which will come with DBFO.

Cullen references the work done by the FAAA around Dixon Advisory and the CSLR as a victory for the industry, pointing to the review into the failed vertical integrated scheme.

“It’s been through the joint association working group, giving a better collective voice and engagement with government.”

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