A proactive rather than a reactive approach to addressing poor financial planning and advice compliance practices is needed to ensure better outcomes for both advisers and their clients in the future, a chartered accounting firm partner has said.
“Unfortunately one of the key themes my team and I see is too often a reactionary or a band-aid approach to addressing the sorts of issues that are coming up through the press, through the royal commission and through ASIC (Australian Securities and Investments Commission),” KPMG partner Nathan Robinson said during his presentation at the most recent Financial Planning Association Sydney Chapter breakfast.
“That approach of applying Band-Aids to problems is adding complexity cost to the advice process without necessarily having any tangible benefits to end clients.
“And it’s certainly not having any positive impact on the profitability or viability of advice businesses.
“And largely it’s having a negative impact on the health and well-being of advisers and others being involved in the advice process.”
However, on a positive note, Robinson said he is already seeing changes to processes that indicate the industry is heading in the right direction and towards a positive future.
“Licensees are starting to think more about changes that are not only designed to address compliance issues, but also to improve the efficiency of advice business, to enhance customer experiences and hopefully deliver both better outcomes and a stronger bottom line,” he said.
He said this shift is occurring through the adoption of technology, embracing rather than fighting change, and giving more consideration to the markets and segments advisers are targeting and how they are delivering value to their clients.
“So while ongoing change and scrutiny in our industry is inevitable, and it’s hard, I remain optimistic about both the value of financial advice and the direction in which the industry is heading,” he said.
“If we can balance what sometimes seems like conflicting priorities, and manage to stay on top of regulator expectations and legislative change, while also focus on achieving efficiency and delivering value, I do think the future for advice can be bright.”
In related news, the SMSF Association has also called fora review of SMSF-related advice claiming the current review of advice overseen by the Tax Practitioner’s Board will be insufficient for tackling problems with advice provided to trustees.