For details of the trend, you can check out articles such as this one at IFA.com.au and this one at Professional Planner. 

Last week, the Financial Services Council in Australia announced their plan to save the sector.

The way Australia’s advice sector is regulated, and indeed the way Australia’s financial services sector works from superannuation to accident compensation, is so different that it makes direct comparisons hard but some broad themes emerge:

- Advice has suffered death by thousands of new rules, adding to the complexity of the process beyond the capability of most small advice businesses – and arguably beyond the capability of most clients to understand.

- Headline measures that we recognise (such as disclosure of commission) are almost drowned among some that we find baffling,  such as a requirement for a post-graduate level qualification in ethics. I don’t know anyone who thinks the industry is so complex that we’re all crooks until we have a level seven diploma.

- The time taken to prepare advice has risen to the point where it is no longer possible to charge a sufficient upfront fee to cover it for most clients – so the provision of plans to new clients is no longer economic.

The goal of the FSC’s proposals is to bring the working time required for the financial advice process down from 23.9 hours to 17 hours.

Think of that over two-thirds of a working week!

The facts of the matter must give the lie to all the economic impact reports that were prepared carefully, prudently, assessing each change as both necessary and affordable.

Some will still defend the changes as affordable – even while others will find rising evidence of the absence of financial advice for people on average incomes.

Fortunately, we have a different approach here.

Some advisers complain about the lack of clear guidance from our regulators because we have adopted a principles-based approach.

The advantage of our legal and regulatory approach is that we have more flexibility and fewer fussy rules that can leave you in technical breach even when you have fulfilled the spirit of what is required for the client - long may we hang on to it.

I am certain it will only be retained with a great deal of vigilance and engagement with those in our industry bodies that work with MBIE, RBNZ, and the FMA.