Will affordable financial advice make a comeback?

The implementation of changes occurring as a result of the Quality of Advice (QAR) can create potential for financial advisers to change the way they service clients as well as how many clients they serve, according to The Advisers Association (TAA).

TAA chief executive, Neil Macdonald, said that the significant time savings would result from removing “much of the unnecessary paperwork and duplication that currently exists within the profession”, which would allow advisers to service more people.

He also noted that if a large amount of unnecessary work was sliced out of any service, it would significantly reduce the cost to provide that service and allow that time to be used more productively.

“A classic example in our profession is ultra-long statements of advice that are left largely unread by clients, and which are fast-becoming unnecessary, if they are not already,” he said.

More importantly, Macdonald said, was how quickly the financial advice was prepared to move with the times and factor in efficiencies and cost savings that QAR and other changes would bring about.

“Like any profession, we will eventually bring in new processes and new people who will charge less, based on less experience,” he said.

Additionally,  the industry would need to adapt to changing demographics which would mean a change in clients’ needs, with younger people coming  to advisers with different expectations – for example, for a ‘health check’ and episodic advice.

“However, those parts of the advice community, including practice principals and licensees that refuse to evolve, as Darwin famously stated, will most likely become extinct,” he concluded.