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Forward Thinking Magazine : August 2011
6 Macquarie Adviser Services Macquarie Adviser Services Macquarie Adviser Services “I think as advisers today we’re already providing continuous limited advice to our clients, especially where their circumstances are changing,” Macquarie Private Wealth adviser Themi Karakaidos says. “You may have prepared a comprehensive plan for a client a few years ago and you may limit the advice this week to a particular change in their circumstances.” But while advisers might be used to providing limited advice, delivering it in a ‘right-sized’ or scaled form has often been more difficult, due to current regulatory hurdles. With the legislation development process still under way, Couchman says she hopes to see that the final legislation truly facilitates scaled advice. “I think as an industry we think it’s a good idea to have a range of advice offerings but the current law often makes us nervous in relation to what the client perceives they’re getting, leading often to the delivery of a more comprehensive advice offering than is actually needed, with all the compliance processes and documentation that goes with that.” In this way, the concepts of scaled advice and a statutory best interest duty are related. “We want to make sure that the new best interest duty obligations can be scaled to the actual nature of the advice given,” Couchman says. “And if that works, then I think it will be taken up.” Macquarie Adviser Services’ Head of Government Relations and Self-Managed Super Fund Professionals Association (SPAA) Director David Shirlow notes that, in the interim, ASIC has released Consultation Paper 164 which sets out its proposals to provide additional guidance on how to scale advice. The guidance will ultimately be developed taking into account the FOFA reforms. For clients, scaled advice means they will be able to source advice in a range of ways – and a flexible and accessible service offering must surely be more attractive to more Australians and therefore a benefit to the industry. Licensing of accountants The detail of how an accountant’s licence will work was still to be decided at the time of writing. How easy it will be to pick up an accountant’s licence was a collective concern of the round table panel, as was the kind of evidence a practitioner will need to show to demonstrate their competency. Other unknowns, such as the nature of a licence, the process accountants would need to go through to get a licence and the compliance associated with it, also make this a hot issue for practitioners. THeMi KARAKAidoS I think as advisers today we’re already providing continuous limited advice to our clients, especially where their circumstances are changing. “I think the scale of advice is good but I also present the other side, which is what happens if I have a client who wants to contribute an extra $20 a week into their super?” Tramontana says. “From my experience, I would just ring up my accountant and say ‘okay, should I be doing this?’ Whathappens–doIhavetopayafeetobeable to be given a bit of advice to say whether or not I should make that contribution?” According to Jane Couchman, Division Director of Macquarie Private Wealth, addressing such issues requires a change in mindset for both consumers and advisers. She believes that consumers will need to be educated about the value of advice before they will be prepared to pay for it, and the advice industry is going to have to come up with ways of making advice more compelling. “There are certain areas of advice that are about a change in mind-set for the client to understand the value of getting advice, as well as for the adviser to actually sell the advice proposition,” she says. Limited advice is not a new concept to SMSF practitioners.