FSC floats proposals to lower the cost of providing advice
The Financial Services Council (FSC) has issued several proposals to lower the cost of providing financial advice, with a view of making it simpler for consumers to understand and access.
The FSC has issued Affordable and Accessible advice: FSC Green Paper on financial advice, to lead the public policy debate on a restructure of financial advice.
“The financial advice industry is facing significant challenges, with rising regulatory requirements and cost pressures undermining the economics of the sector. The burden of compliance is doing nothing to help consumers, it’s actually putting advice beyond the means of average Australians, and driving advisers out of the sector," said FSC CEO Sally Loane.
“Our aim with these proposals is to lower the cost of providing financial advice to make it simpler for consumers to understand and access, all without undermining the quality of advice or eroding important consumer protections.”
While it believes the best interests duty should remain the bedrock of the advice sector, the FSC does see "significant opportunities" to reduce the cost and complexity of providing financial advice.
The proposals in the FSC green paper include abolishing the ‘safe harbour’ steps used to comply with the best interests duty; removing "jargonistic advice categories" that confuse consumers; and abolishing statements of advice, and replacing them with letters of advice, which would be short, concise and consumer orientated.
The FSC is now seeking industry and public feedback for its proposals in advance of finalising a policy position on a more accessible and affordable financial advice system which it will publish in a white paper later this year.