The Institute of Financial Professionals Australia (IFPA) has indicated the accounting profession represents an immediate solution to the issue of falling financial adviser numbers and has called for the industry framework to be changed to let this cohort of practitioners play a meaningful role.
“The point deserves emphasis: accountants should once again be allowed a limited, sensible role in the advice framework,” IFPA president and chair Scott Heathwood said.
“Accountants already hold trust, visibility over financial life events and a long-standing relationship with their clients. They are uniquely positioned to bridge the advice gap for everyday Australians.
“I told former [financial services] minister Stephen Jones this directly two years ago: accountants are not the problem; they are part of the solution.
“Allowing accountants back into the regulated advice space, with proper guardrails, would increase accessibility, reduce bottlenecks and meaningfully complement the work advisers and industry funds are trying to do.”
Heathwood also took the opportunity to acknowledge the important role ‘high-volume’ advisers play in the sector to help deliver advice to a greater number of Australians.
To this end, he pointed out these practitioners have the ability to provide services to individuals who cannot afford to pay for bespoke advisers.
“One of the more contentious criticisms is the role of ‘high-volume’ advice providers: scaled, digital-enabled or hybrid advice groups that serve thousands of Australians who might otherwise fall through the cracks,” he noted.
“These models are often accused of offering ‘not much advice’ or relying on volume rather than depth. But this caricature is unfair and misses the structural reality of today’s advice market.”
Further, he suggested the industry is suffering from overregulation, which is in turn driving up the price of financial advice.
“Since the [Hayne] royal commission, every advice interaction, from a rollover to a risk review, sits under a compliance structure that is both rigid and costly. Annual opt-in, fee consent forms, expanded best-interest obligations, FAR (Financial Accountability Regime) reporting, product comparisons, safe-harbour steps, expanded audit trails and the surge in PI (professional indemnity) insurance premiums have all contributed [to the rising cost of advice],” he explained.
“Clients rarely see this. Regulators rarely acknowledge it. But advisers live it daily.”
