Fees vary depending on the scope of advice and range from $800 to $12,000. In any case: ouch!
Big changes are afoot, however, with proposals revealed this week that aim to make financial advice cheaper, without compromising its quality.
A review by lawyer Michelle Levy, for the Australian Treasury, has proposed that the current requirement that advisers act in the ‘best interests’ of clients be abolished, in favor of a requirement to produce ‘good advice’ .
The review also proposes scrapping ‘advice statements’, along with reforms to make it easier for banks, super funds and insurers to offer personalized advice to clients, whose circumstances they already know better. finance through improved data.
“People want personalized 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 various scandals in the financial advice sector – could lead to lower quality advice.
“Having to seek the services of financial advisors for simple money matters is a bit like having to see a heart surgeon for advice on heartburn.”
In its submission for review, consumer advocate Choice recommends that the test be retained, to protect quality, and that affordability be addressed by Australia by replicating the UK’s Money and Pensions Service, which provides a taxpayer-funded telephone service that all citizens can call to help build their financial capability.
Australia has a free national debt helpline (1800 007 007) which connects callers to a network of financial advisers (as opposed to more qualified financial advisers), but it largely caters to people in financial difficulty.
Unlike the UK, our policymakers have recently spent a lot of time pulling alternative sources of financial literacy, including the Commonwealth Bank’s Dollarmite school program, from the market and cracking down on so-called “influencers” offering online financial advice.
Meanwhile, responsibility for building the financial capability of Australians has been shifted from the corporate regulator to a division of the Treasury.
Reviewing the formal advice industry that only one in 10 Australians use is one thing, but I think it’s time for policy makers to step in with a broader strategy to help people manage their finances throughout their life cycle. Indeed, although we are all special and unique individuals, the basic principles of good financial hygiene – like spending less than you earn, avoiding high-interest debt and investing responsibly for a cozy retreat – are not rocket science.
Using the services of highly qualified financial advisors for simple money matters, such as developing good saving habits to reach your goals, is a bit like having to go to a heart surgeon for heart burn advice. ‘stomach.
Whether through 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 advisers, who should be held accountable for the quality of the advice they give.
Being able to access affordable help to help you navigate your financial life should be a right enjoyed by all Australians, like access to healthcare. And you shouldn’t have to break the bank to get it.
- The advice given in this article is of a general nature and is not intended to influence readers’ decisions regarding investments or financial products. Before making financial decisions, they should always seek their own professional advice that takes into account their personal circumstances.
Jessica Irvine is the author of the new book Money with Jess: Your Ultimate Guide to Household Budgeting. You can follow Jess’s other money adventures on Instagram @moneywithjess and sign up to receive her weekly email newsletter.