loading
Fees vary depending on the scope of the advice and range from a minimum of $800 to $12,000. Be that as it may: alas!
There are big changes, however, with proposals revealed this week that seek to make financial advice cheaper, without compromising on its quality.
A review by Australian Treasury lawyer Michelle Levy has proposed scrapping the current requirement that advisers act in the “best interests” of clients, in favor of a requirement to produce “good advice” .
The review also proposes the abolition of “statements of advice”, along with reforms to make it easier for banks, super funds and insurers to offer personalized advice to customers, whose financial situation they already know better thanks to of the data.
“People want personal advice,” says Levy. “Consumers want to talk to someone who can tell them what to do. And they want them to use the information they have.”
Consumer advocates, however, fear that the relaxation of the “best interests” test – introduced after several scandals in the financial advice industry – could lead to poor quality advice.
“Having to seek the services of financial advisers for simple money matters is a bit like having to see a heart surgeon for heartburn advice.”
In its submission to the review, consumer advocate Choice recommends that the test be maintained, to protect quality, and that Australia address affordability, replicating the UK’s Money and Pensions Service, which offers a taxpayer-funded telephone service that all citizens can call. help build their financial capacity.
Australian has a free National Debt Helpline (1800 007 007) which connects callers to a network of financial advisers (as opposed to more highly qualified financial advisers), but is mainly aimed at people who suffer financial difficulties.
In contrast to the UK, our policymakers have spent a lot of time recently removing alternative sources of financial literacy from the market, including the Commonwealth Bank’s Dollarmite schools programme, and cracking down on so-called ‘finfluencers’ who offer financial advice online.
Meanwhile, responsibility for building the financial capacity of Australians has shifted from the corporate regulator to a division of the Treasury.
loading
Reviewing the formal advice industry that only one in 10 Australians uses is one thing, but I think it’s time policy makers stepped up to the plate with a broader strategy to help people navigate their finances throughout its life cycle. That’s because, as much as we’re all special and unique individuals, the basics of good financial hygiene, like spending less than you earn, avoiding high-interest debt, and investing responsibly for retirement comfortable, they are not rocket science.
Having to seek the services of highly qualified financial advisors for simple money matters, such as developing good savings habits to meet your goals, is a bit like having to go to a heart surgeon for advice on acidity
Whether it’s a national helpline or a network of accredited financial coaches, there should be someone Australians can call to support them on their financial journey.
And just as a GP might refer you to a specialist, these coaches might refer more complex cases to financial advisors, who should be held to a high standard for the quality of the advice they give.
Being able to access affordable support to help you navigate your financial life should be a right that all Australians enjoy, similar to access to healthcare. And you shouldn’t break the bank to get it.
- The advice given in this article is general in nature and is not intended to influence readers’ decisions about investments or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.
Jessica Irvine is the author of the new book Money with Jess: Your Ultimate Guide to Household Budgeting. You can follow more of Jess’ money adventures on Instagram @moneywithjess and sign up for her weekly email newsletter.