Clarifying fees in the new regulatory environment

Among the measures included in the government's response to COVID-19 is providing easy access to professional financial advice. It's something that was roundly welcomed by professional bodies, including CPA Australia, Chartered Accountants Australia and New Zealand, SMSF Association, Financial Planning Association, and the Institute of Public Accountants.

The decision by ASIC will make it easier for Australians to get advice about their financial position. For example, a Registered Tax Agent can now give temporary advice about early access to super without having to hold an AFS license. And, simplified advice documents will mean it's easier to get advice to people more quickly.

SMSF Association CEO John Maroney said, "The professional bodies have worked together with ASIC to provide regulatory relief for financial advisers and Registered Tax Agents that allow them to provide advice in the most efficient, timely, and cost-effective way to individuals in the current environment."

As of last week, more than 600,000 Australians had requested early access to their super, a number that is expected to continue to grow. "The measures announced today, in conjunction with the extensions to the deadline for FASEA exams and qualifications requirements already announced, should send a message to advisers: please continue to provide quality advice to Australians," said Jane Hume, Assistant Minister for Superannuation, Financial Services, and Financial Technology.

Clarity around future fees

The one area that still provides a challenge is the standardisation of fees under the proposed Advice Fee Consent legislation.

Licensees and platform providers have already committed to defining a consistent industry approach, led by Iress.

The legislation has long tail implications, however the increased workload on advisers and licensees means that the sooner the details are outlined, the better for everyone involved.

Count chief exec Matthew Rowe said that it was crucial the industry work together to get the process right. "Our modelling indicates the new disclosure requirements will create an additional 50,000 hours of non-client facing work, a 280% increase. This time is better spent serving our clients, particularly now. There is a strong need for the industry to agree to a digital, consistent and automated process to ensure we can maintain a balance in meeting regulatory obligations, delivering for clients and having a financially sustainable advice profession."

More than 80 people joined an industry call about how to tackle charging for services in the new regulatory environment. The one thing that kept coming up was the need for an efficient solution.

IOOF's head of platform technology and architecture, Damien O'Donnell, said, "Working together as an industry solving a pressing business problem with a technology solution is an opportunity for us. What we are looking for is an efficient, intuitive and standardised solution which will provide confidence we are satisfying our obligations to all of our stakeholders - members, clients, advisers and trustees."