The Financial Advice Association Australia (FAAA) is hopeful the introduction of a new class of adviser, as defined under the Delivering Better Financial Outcomes (DFBO) legislation, could be an opportunity to offer a new type of advice that is cheaper and could also help improve access to financial advice for more Australians.
“Many of our members are keen to have a look at it and see it as an opportunity for them to potentially offer a type of advice that would be more cost effective, that would enable them to serve a broader group of consumers at a lower price point,” FAAA chief executive Sarah Abood told attendees of a recent member webinar.
The definition of the new class of adviser is to be included in the DBFO legislation still pending and to this end, Financial Services Minister Daniel Mulino has told the FAAA he is hopeful to have the relevant draft bill available this year.
“The Minister has said to us in his first meeting with us, and also publicly a couple of times since, that he does see it as important. That he is focused on delivering these changes,” Abood revealed.
“At the same time, he’s also noted that they’re complex and there’s a lot of stakeholders involved, and it’s not something that you can just do quickly at the drop of a hat.”
The new class of adviser will be limited to giving simple advice on prudentially regulated products, such as insurance and superannuation. Abood again cautioned against the use of the term ‘adviser’ for the new cohort of practitioners due to its implications among the public and stated the FAAA’s preferred reference would be ‘provider’.
“It’s really important for us to ensure that simple advice that will be offered by this new class will be simple and that we’re not sending ourselves back to pre-royal commission days where recommendations are being made to consumers that aren’t in their interests,” she explained.
According to Abood, the industry body is keen to see the legislation so its members can assess how the new class of adviser can be used within businesses to help provide more advice.
“No one can really do much work on that at this stage until we see the legislation, others are looking at it and certainly we’re looking at that new class as an opportunity for a training ground for new advisers,” she said.
