When it comes to financial advice, lower cost is not synonymous with poorer quality. This has been widely misunderstood by many commentators, writes Financial Planning Association CEO Dante De Gori CFP®.
Financial advice is in high demand among Australians, with 41 per cent of us intending to get advice in the future. But how that advice is provided, and the cost of advice, are issues that still require fine tuning.
The Financial Planning Association (FPA) is the leading Australian professional association for financial planners. We take a leadership role in regulatory reform and policy to drive progress in the financial planning profession.
Through strong relationships with government and regulators, we are the collective voice of over 14,000 our members and their clients, including 28 indigenous members. Our members represent best practice financial planning that puts the interests of the client first. We strive to create a professional culture of accountability, setting and enforcing professional and ethical standards that result in trusted and transparent financial advice.
The FPA is committed to building a profession of financial planners who enrich the lives of all Australians – not just the wealthy.
Making advice more accessible
The financial planning profession is currently at the crossroads of what could be the most defining moment in its history. Increased compliance requirements, higher education standards, and rapidly changing market dynamics are all challenges facing the industry.
Those who argue that the rising cost of financial advice will cripple the industry, though not disputing this possibility, also fail to recognise the work currently underway to ensure financial planning is a viable option for all Australians.
New innovations and technologies are rapidly being adopted at a practice level by financial planners across Australia to streamline efficiencies within their businesses and reduce compliance costs.
Meanwhile, many superannuation funds now offer advice to their members and are integrating digital advice offerings along with intra-fund to help Australians who may not be able to afford full-scale financial planning.
It is important to recognise the depth and breadth of the advice profession, one where industry participants offer different levels of service depending on the needs of their clients.
A full-scale financial plan may not be affordable for some, but there are other options available and lower cost is not synonymous with poorer quality – this has been widely misunderstood by many commentators, to the detriment of many Australians.
FPA members are taking innovative approaches to tacking the affordability of advice including subscription-based fees for service and helping younger generations with their savings and household budgets.
These efforts and the collective willingness to work towards a solution should be commended, not criticised, as it is having a positive impact on the lives of Australians as they navigate the complexities of managing work, life and their personal finances.
Encouraging new entrants to the profession
Overall, I am optimistic about the future of the financial planning profession. We know demand is increasing and, with financial planner numbers currently declining, we arguably do not have enough financial planners to meet that demand.
We will start to see more financial planners enter the profession via the university system and the opportunities for new entrants is huge.
For anyone looking for a great career opportunity, I would highly recommend our profession as the job prospects are outstanding going forward.
With the reforms that are still taking place and changes in technology, the profession is being set up for a very bright future.
Community support and pro bono work
In 2017 we launched our Pro Bono Financial Planning Referral Service with Cancer Council.
The nationally structured referral program helps families affected by cancer who are unable to afford the cost of financial advice by connecting them with financial planners who can provide their services on a pro bono basis.
In January this year, we established a pro bono support program for Australians impacted by the bushfires. The FPA community supported those who suffered in the 2009 Black Saturday bushfires and we wanted to offer our support again.
Financial planners involved in the bushfire support program are matched with individuals who have been directly impacted by the bushfires and who are in need of financial advice including matters relating to insurance, debt management, investments, superannuation and more.
Pro bono work is an important aspect of the FPA’s work. We are now actively exploring options to work with the First Nations Foundation and provide similar pro bono support in the future.