Please KISS Minister Jones…..
With the Minister’s recent nuptials, the literal meaning of KISS will not apply but we hope the other interpretation does – ‘KEEP IT SIMPLE STUPID’……
Over the past 15 years our industry has been the classic political football where everyone has an opinion and like ‘old tom/tamara’ cats everyone wants to mark their territory. It is time to keep it simple.
With Institutions largely out of advice thanks to the Royal Commission, we need to give them a simplistic solution to inform their constituents/members of product information without the need to be licensed. The last thing consumers would want is Banks back into Advice, history strongly suggests they are not very good at it.
We cannot go back to the 1990’s of Institutionally aligned Advisers masquerading as Independent Advisers confusing consumers. Who ever thought of the ‘Qualified Adviser’ concept is either naive or trying to return the industry back to those ugly highly conflicted s923A days where consumers were the greatest losing stakeholder.
Recently we have been in deep discussion with several Industry Super Fund management teams to provide a third-party advice piece to their fund. Interestingly, most are seriously considering retaining only inhouse trained staff to service members with product information and outsource the independent advice to professional advisers if the Minister selects this solution.
This model provides an immediate saving to the Fund with trained staff on circa half the cost of licensed advisers, it eliminates the AFSL costs/risks for management and inhouse trained staff can study part time if they want to become a licensed Adviser. The other benefit for the Fund is new inflows from the Advice industry.
The benefit for members is massive cost savings and therefore higher account balances.
This model can be implemented quickly and cost effectively for Super Fund member’s benefit but of equal importance it emphasises the primal differentiation in our industry where product and advice must be entirely separate functions.
The KISS outcome will allow all financial institutions to inform their constituents of product information without the need for internal staff to be licensed and that is a gigantic step forward to the perfect environment for consumers to seek advice.
Peter Johnston | Executive Director
