Sarah Abboud questioned whether financial advice was “too complicated” for the average Australian and reiterated the importance of digital tools to address accessibility issues.
Aboud, chief executive of the newly formed Australian Financial Advice Association (FAAA), recently spoke at a panel discussion hosted by law firm Hall & Wilcox on 12 May.
She criticized the complex legal system that underpins the advice industry, leading to growing issues of accessibility and affordability.
“It became almost impossible to get around on my own,” she said.
“There are far fewer advisors than there used to be, partly because regulation has snowballed in the last few years.”
The FAAA chief estimated that it would be difficult for Australians to get comprehensive advice for less than $3,500.
“This definitely exceeds expectations that the average consumer has in terms of how much advice can cost.”
Discussing the role of digital advice in the industry, Abboud asserted that it is very important as many consumers expect to receive information in an online format.
“If the fund doesn’t have some form of digital strategy for its members, it will be very difficult,” she added.
In November 2022, she previously told members that financial planners will be able to use online avatars for client meetings by 2030.
For Abboud, the question was what information would be needed to achieve a high standard of advice, and how far could advisors take advantage of digital tools?
“The idea of needing to engage with our members digitally is important, but we also need to be able to find ways to help them when they need more help.”
Whether it’s a digital tool or a call center agent providing advice, Aboud noted that the more important question is whether it’s quality advice.
Additionally, it was imperative that the client really understood how to apply the advice given to their financial situation.
“Traditionally, that role has been played very well by financial advisors. [digital] With a calculator, they’ll ask, “What do I do with this?” what’s next? ‘”
“The idea that digital tools are brokered and explained to consumers by someone with the knowledge to do so is [alongside] Empathy and skill, that gives the best and the best results. ”
With Financial Services Minister Stephen Jones expected to release his views on a review of the quality of advice in late May or early June, Abboud also said the cost of advice would be reduced by removing onerous provisions. The list of “fast-acting methods” was repeated. .
“There is certainly a set of proposals that we hope to be able to implement fairly quickly,” he said, including the obligation for advisers to submit statements of advice (SoAs). He said it also includes things that are not.
More complex proposals included the possibility of unrelated health care providers and retirement funds providing personal advice, causing widespread debate and uncertainty.