Kelly Power, CFS Superannuation CEO says that consumers need about 1M to receive financial advice and that those with only $150,000 to $200,000 can’t afford financial advice.
SOA’s to be replaced with CAR
Tranche 2 DBFO draft legislation was released mid-March 2025. The new advice record will be officially called:
Client Advice Record (CAR).
Tranche 1 referred to the new SOA as an Advice Record, but this has now been modified to include reference to the client
With the government in caretaker mode and if the opposition wins the election on 3 May, I expect the new government will conduct its own review before passing the legislation. Both parties want to reduce the complexity of advice, and ultimately reduce the cost of receiving financial advice. This may finally allow those most in need of financial advice to have access. But the devil is in the detail.
The Client Advice Record is intended to provide the following information:
- Scope of Advice
- Reasons for advice, taking into account the client’s particular situation
- Cost to client and any benefits received by the adviser
- Records must be maintained and demonstrate that the adviser acted in the best interests of the client
- Conflicts of Interest between the client and the adviser must be considered and demonstrate that the client’s interests are foremost
- Good Advice must be provided, and this is characterized as personal advice fit for purpose and taking into consideration the client’s specific needs
- How to lodge a complaint if the client considers it necessary
- Client Data Form (CDF) and Risk Profile (RPQ) should be used to consider the client’s needs and tolerance to risk
Servicing the needs of average Australians
While the government is heading in the right direction, the cost of financial advice is still likely to be beyond the affordability of average Australians who earn between $100,000 and $120,000 a year. The government has suggested that new platforms to deliver affordable advice will need to be developed. Advice Online is one of these platforms.
Plencore Wealth Ltd, developer of Financial Mappers for Financial Professionals has developed a second product called Advice Online.
This product is intended to fill the gap by allowing the advice process to be a collaboration between the client and adviser.
Millennials are more likely to embrace this process. By engaging with this new demographic, before they can currently afford financial advice, the adviser is likely to keep that client forever, taking them through both the wealth accumulation and wealth decumulation phase of their lives.
For the adviser, one advantage of this product is that there is no upfront annual fee. There is a small fee for each Advice Record that is created.
The Advice Online website has a set of four Demonstration Videos that explain how the product could be used in various stages. These should be watched in order as each builds on previous features demonstrated.
Half the population can’t afford financial advice, and institutions struggle with technology integration and client understanding. To learn more, please watch the video, Financial Advice Powered by Advice Online.
Glenis Phillips SF Fin – Developer of Financial Mappers and Advice Online
Disclaimer: Financial Mappers does not have an Australian Services License, does not offer financial planning advice, and does not recommend financial products.
