Affordable quality advice on FAAA 2024 radar

The Financial Advice Association Australia (FAAA) has indicated its three focus areas for the year ahead, renewing its commitment to delivering “meaningful and positive changes”.

Sarah Abood, chief executive of the association, said the focus areas look to ensuring “clarity and certainty about the provision of financial advice” for both financial advisers and their clients.

“The FAAA will be focusing on three main areas during 2024 – making it easier and cheaper to provide advice; re-engaging with consumers; and growing the profession,” she said.

Abood said the FAAA will collaborate “closely” with government, regulators and stakeholders to remove the blocks to easily provide cheaper financial advice. She highlighted the benefits of using technology in this space to “streamline operations and reduce cost”.

“The FAAA has been generally supportive of the package proposed by the Federal government in response to the Quality of Advice Review recommendations, but there is still a way to go with important details still missing in some areas. We are calling on government and regulatory bodies to move swiftly to provide the necessary detail, and timelines for consultation and implementation,” she said.

“We continue to engage on a number of other areas which impact on members’ costs of doing business, including the ASIC levy, and the implementation of the Compensation Scheme of Last Resort (CSLR).

“We will be including the role of AI, looking at both its ability to assist in the delivery of advice but also its potential to do damage. There are a range of social, ethical and legal questions that we will be working through with members in this space.”

According to Abood, improving the financial literacy and awareness of the value of advice for consumers and clients is another important goal for the FAAA in 2024, particularly in relation to receiving advice from “a qualified, professional adviser”.

She said there is lots of published research that indicates the benefits advice has for both financial and general wellbeing and encourages both providers and consumers to self-educate to best suit each other’s needs.

“It is encouraging that research by the Governance Institute of Australia shows that perceptions of the ethics of financial planners continues to improve, according to its latest Ethics Index 2023 (2023: 21 compared to 2022: 16). Financial advisers are now more trusted than many occupations – including for example, lawyers and CEOs (which both ranked 9 in 2023),” Abood said.

“However, there is still a perception that financial advice is only for the already well-off. The reality is that the majority of working Australians, as well as retirees, can benefit from the advice of a registered, qualified financial planner and will receive great value, as the benefits of financial advice far outweigh the cost for average as well as wealthy Australians.

“We have a financial system that’s so complex that the average Australian simply can’t navigate it on their own and will miss many opportunities if they don’t have professional advice. In addition, the rise in financial fraud and cyber scams makes it increasingly important that people have the knowledge and tools to avoid these risks and take steps to protect themselves.”

Abood said the association was also looking to grow the number of entrants into the profession by targeting students and overseas professionals but also to solidify the number of those sticking around, after concerns regarding the falling number of financial advisers in the last few years.

“We need more great advisers, and to achieve that we need to get the message out there that financial planning has a really attractive career path. There is no reason that we can’t reach more than 100,000 financial advisers. There are around 200,000 registered accountants in Australia, and the need for financial advice is just as significant.

“We will be looking at ways to increase the number of students enrolling in financial planning degrees. Financial planning is also a great option for those people looking for a career change, who bring knowledge, experience and gravitas to the profession.”