In early November 2024 Liberal MP Bert Manen introduced to parliament a private member’s bill saying to was time to improve and streamline the financial advice process. What I find strange is that the government had organized a Review of the Quality of Advice, with the intention of implementing those recommendations so that financial advice could be streamlined and made simpler.
Quality of Advice Review
The final report for the Quality of Advice Review was handed down in February 2023. The first tranche of these recommendations were enacted in March 2024 with the Delivering Better Financial Outcomes and other measures Bill 2024. The recommendations that passed parliament
- Deduction of adviser fees from superannuation
- Ongoing fees and timing of consent
- Flexibility for FSG disclosure
- Conflicted renumeration
- New client consent for insurance commissions
It has generally been accepted that the remaining recommendations will be enacted at some time in the future. But, according to Keith Ford, in his IFA article, ‘Blessing in disguise’: is a DBFO tranche 2 delay better for advisers?’, it seems the industry does not expect tranche 2 to be enacted before the next election.
This is disappointing for both the consumer and members of the financial advice industry. This hold up, may be stopping advisers from reducing adviser fees when they have a simpler and more efficient means of delivering financial advice. It is also disappointing to consumers, many of whom are excluded from seeking financial advice because of the fee structure.
Financial Advice Online
I believe that most millennials, simply want a broad outline to demonstrate:
- How much they should be saving on a regular basis to meet their target retirement income.
- An overview of asset allocation to ensure investments are diversified.
- Debt management strategies for reducing Bad Debt’ and replacing with ‘Good Debt’. ‘Good Debt is intended to grow the client’s wealth.
It is possible to provide that information now. An adviser can provide Limited Advice.
Limited Advice is personal advice that does not cover all possible topics to the client.
Limited Advice can also be called ‘Scaled Advice’.
The quality of the advice should be the same as full-service advice, but the adviser limits what advice is provided. This advice may be limited the scope of advice – say to a set period, or exclusions such as insurance or specific product recommendations.
Advice Online is a product that can be used for both full-service and limited advice. The primary purpose of Advice Online is to simplify the advice process. This is assisted by asking the client to complete a Fact Find that can then be imported into a financial plan. The financial adviser will optimise the plan according to the client’s listed objectives for the financial advice. From there, the adviser can quickly write their advice in a selection of panels. The software is then able to generate an Advice Record together with another 10 automated reports.
With this software, the client can log into their portal and review any of these reports.
Advice Online introduces the concept of Interactive Reports. In addition to generating these reports as PDF’s, the adviser can demonstrate the report in small sections that are supported by graphs and tables of information. After the meeting, the client can be given a link so that they can continue to review and understand the content of the advice.
This short video, Financial Advice Online explains the process for delivering affordable financial advice.
Glenis Phillips SF Fin – Designer 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.
