The Financial Advice Association Australia (FAAA) has called on Financial Services Minister Daniel Mulino to use his National Press Club address next week to deliver a commitment to prioritise making financial advice affordable for more Australians.
The FAAA said to do this, the government needs to act on four key issues that impact the ability of people to access affordable advice from trusted professionals.
These include making the Compensation Scheme of Last Resort (CSLR) sustainable so financial advisers do not have to bear its increasing costs, which it recognises will inevitably translate to higher advice fees for consumers.
“Financial advice has never been more important, but too many Australians simply cannot afford it,” FAAA chief executive Sarah Abood said.
“The median price of financial advice has shot up by 65 per cent over the past five years and is currently around $4700. Every dollar added to the cost of providing advice makes it harder for consumers to access that advice.”
FAAA research also found 90 per cent of advisers expect the CSLR levy to further increase the cost of advice.
The industry body also implored the government to focus on preventing future harm, especially from lead generation practices that direct people towards inappropriate financial products.
Citing the collapse of Shield and First Guardian, which led to huge financial losses for about 12,000 Australians, Abood indicated people need stronger protections against predatory lead generation.
“We support the government’s proposed education reforms and urge government to bring these forward as soon as possible. Growing supply and ensuring there are a diverse range of advice practices will help lower costs for consumers, while also ensuring they have genuine choice in how and from whom the service is accessed,” she suggested.
Further, the FAAA identified two other issues deserving priority, being the implementation of sensible Delivering Better Financial Outcomes reforms and more support for the growth of the financial advice profession across all business models.
