Bravura believes the proposed reforms will drive innovation to demonstrate the quality of advice, as well as increase the scale and reach of advice services, lending to improved market competition.
The Quality of Advice Review proposes reforms to simplify the regulatory framework to better enable the provision of high quality, accessible and affordable financial advice for retail clients.
As outlined in Bravura’s submission to the Quality of Advice Review Proposals Paper consultation, we believe the proposed shift to regulate the outcome of advice rather than the process – with a focus on providing ‘good advice’ – is a more effective way to serve consumer needs. This will facilitate innovation around how advice is provided, with technology pivotal to enabling this innovation and achieving the objectives of this review.
The review has been deliberate around encompassing all advice providers; broadening the scope of organisations that can provide advice is an opportunity to fill the consumer advice gap.
Currently most Australians are not able to access a personal financial advice service, with cost and trust critical barriers. And while it is not economical for advice businesses to support all Australians who could benefit from financial advice, enabling more organisations to provide advice will increase opportunity for Australians to access advice.
If the proposed reforms pass, superannuation funds, banks, other financial product providers and new entrants have an opportunity to become key players in the provision of financial advice; however, this will only work if they have confidence that they can invest in and manage the risks inherent in providing personal advice. We see technology as a key enabler for these organisations to deliver a scalable personal advice service.
Bravura believes that if the proposed changes pass, advice businesses will need to innovate and may need to accept additional business risk to be competitive. Pleasingly, the proposed reforms will support increased digitisation in the advice profession. With its Midwinter financial advice software, Bravura has already built and is continuing to develop new digital client facing technology that will support consumer engagement and ‘good advice’ outcomes through access, transparency, education, and increased adviser efficiency.
The future of the advice profession is a hybrid model, combining digital and adviser-led interactions. Digital technology will provide advice for simple consumer needs and support interactions with professional advisers. All advice providers could benefit from a single advice engine that can service all types of advice and channels including general information, self-directed, intra-fund, and comprehensive advice, leveraging efficiency and risk reduction from common components which can be tailored to different audiences or individual situations.
You can download Bravura’s official positioning statement on the Quality of Advice Review Proposals Paper here, or head to the Treasury website to find out more about the Quality of Advice Review.