The recommendations of the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, chaired by Kenneth Hayne, have not improved the affordability and accessibility of financial advice, the Association of Financial Advisers (AFA) has said.
Following the second anniversary of the release of the final report of the Hayne Royal Commission, the AFA stated it had become increasingly obvious since the report was handed down that some of the recommendations were not in the interests of all consumers of financial services.
“In the advice space, it is increasingly apparent to all that financial advice is rapidly becoming inaccessible and unaffordable for everyday Australians. Nothing that Hayne recommended is going to improve that,” the association said.
“In fact, it is going to materially increase the cost of running an advice practice and providing financial advice. Many clients have already lost access to advice as many grandfathered commission clients have unfortunately been forced out and the minimum annual ongoing fee has risen substantially.”
In particular, it pointed out there were no recommendations in the final report to deliver “genuine simplification”, noting the removal of some exemptions such as grandfathered commissions, as recommended in the report, was not enough to lessen the complexities of the regulatory framework and ensure the provision of accessible, affordable advice.
“Two years after the release of the Hayne royal commission final report, the impact is still flowing through,” it added.
“In the context of the change in the financial advice sector dynamic and the increased focus upon access to and affordability of financial advice, we can only hope that the government and the parliament will give greater consideration to the impact of these reforms on the cost of providing financial services. We want to see more great advice provided to more Australians, not less.”
Last week, the AFA urged the federal government to use the recently proposed adviser disciplinary body to simplify the financial advice industry.
