28 April 2011
Yellow Brick Road Wealth Management has given their broad support to the Minister for Financial Services and Superannuation, Bill Shorten, with regards to today’s proposed FOFA reforms. The company particularly applauds the Minister’s expansion of ‘scaled advice’ in an effort to give all Australians access to basic guidance on a limited range of matters without the requirement for ‘holistic advice’ when the clients do not require it.
“The removal of regulatory barriers to the provision of advice for those with simpler needs is the single most important aspect of the Minister’s proposed reforms,” says Yellow Brick Road Executive Chairman Mark Bouris. “Australians should be given every opportunity to receive quality advice in order to secure their financial future, and the expansion of ‘scaled advice’ is a critical step towards this goal.”
Yellow Brick Road believes that any extension of limited advice on an affordable basis for more Australians will help redress the unfortunate fact that only 1 in 5 Australians currently receive advice from a financial planner. The company has been a long-time advocate of intra-fund advice, and was most recently in its submission to the Senate Economics Committee Inquiry into competition within Australian banking in December of last year. Today’s announcement both reiterates and extends the company’s advocacy for accessible advice.
In addition to Yellow Brick Road’s support for ‘scaled advice’, the company also concurs with the broad spirit and substance of the FOFA reforms, including recommendations around opt-in, volume-based payments, and acting in the client’s best interests. The company believes these measures will be critical to help restore public confidence and enforce investor protection.
“Opt-in provisions are entirely consistent with the hallmarks of a profession and a fee for service environment,” says Yellow Brick Road Head of Financial Planning Scott Walters. “The move to legislate that advisers act in a client’s best interest is applauded, although this should be ‘ticket to the game’ stuff.”
Whilst Yellow Brick Road supports the broad aspects of the Ministers reform, the company believes that in drafting the legislation, consideration should be given to allowing the payment of commissions on insurance in circumstances where complex advice is being provided to the client, for example, within a self managed superannuation fund.
“In an advised environment, if it is in the client’s best interests to pay their life or TPD premiums from within a self managed superannuation fund, then we see no issue with a commission payment in recompense for the complexity of the advice provided,” says Walters.
Copyright © 2012 Yellow Brick Road
