Australian regulators are examining the root causes of an apparent shortage of financial advice, and possible solutions to the perceived advice gap.
The Australian Securities and Investments Commission (ASIC) launched a consultation on Tuesday that aims to explore the barriers to its investment industry’s supply of “good-quality affordable personal advice” and to recommend measures to enhance access to advice.
In a consultation paper, ASIC reported that its research found that “while many consumers see value in financial advice, they do not tend to seek advice.”
It said consumers often don’t seek advice because it’s seen as expensive and suited to only wealthy investors.
In particular, the regulator said it’s seeking to promote access to quality “limited advice” for investors who don’t need comprehensive advice.
“Market-based research has shown that the cost of financial advice is a significant driver for consumers to prefer limited advice over a traditional comprehensive advice service,” it said.
ASIC is also calling for industry feedback on the industry’s experience in providing digital advice and so-called strategic advice (planning advice with product recommendations).
“Good-quality affordable personal advice may help consumers make better financial decisions, especially during times of heightened vulnerability,” said ASIC commissioner Danielle Press. “We welcome feedback from the financial advice industry and others with an interest in making advice more accessible to consumers.”
“Your feedback is vital for us to better understand the impediments on the supply side,” Press said. “It will help us determine what meaningful steps we can take to help industry better provide good-quality affordable advice that meets consumers’ needs.”
The deadline for submissions to the consultation is Jan. 18, 2021.
ASIC also said that it will hold industry roundtables in the first quarter of 2021 to discuss the results of its consultation.