The consultation paper noted that the financial advice industry has undergone considerable change in recent years, with the financial advice industry experiencing a 14.6 per cent drop in adviser numbers.

“As of 5 November 2020, there were 21,284 current financial advisers on the Financial Advisers Register (FAR). This is approximately 14.6 per cent below the long-term average of 24,930 prior to 1 January 2019,” it stated.

“This is the date on which many of the reforms in the Corporations Amendment (Professional Standards for Financial Advisers) Act 2017 commenced.”

The reduction in the number of financial advisers has led to widespread concern that consumers may find it difficult to access good-quality, affordable personal advice, ASIC stated in the paper.

“Our previous research into the demand and supply of financial advice highlighted that many consumers preferred receiving piece-by-piece or limited advice rather than comprehensive advice,” it said.

In terms of the advice topics of interest, ASIC said advice on investments such as shares and managed funds was the top category at 45 per cent, followed by retirement income planning at 37 per cent and growing their superannuation balance at 31 per cent of consumers.

Areas of focus

The consultation paper outlines several areas of focus including the problems associated with providing limited advice, the guidance and examples on limited advice that ASIC provided RG 90 and RG 244, the terminology used to describe “limited advice” and the availability and affordability of personal advice.

The consultation will also explore experiences with digital personal advice or “robo-advice” and whether it’s a good way of providing quality limited advice.

ASIC will also be looking at whether the problems associated with providing limited advice to consumers is more prevalent in certain sectors or the industry or types of advice licensees.

Some of the feedback questions are focused on limited AFS licensees, for example, which allow firms and advisers that hold these licences to provide product advice on SMSFs and superannuation holdings to the extent required for recommending an SMSF or providing advice on contributions or pensions.

SMSF Association chief executive John Maroney said it was encouraging that ASIC is committing to consult with the industry on this issue of ensuring advisers can provide quality personal advice to consumers that is affordable.

“The association has long been concerned about the regulatory burden involved in providing advice, so this initiative provides an opportunity to find solutions that are affordable and workable for advisers and consumers without sacrificing the integrity of the advice,” Mr Maroney said.

Mr Maroney said that for SMSF advisers, being able to provide limited advice is a key issue.

“We believe this process is our opportunity to address the failed ‘limited licence’ regime and redesign a way for our members to provide scaled advice scoped purely for consumers with an SMSF,” he said.

The association now intends to collate member feedback, provide practical case studies, and undertake roundtables and focus groups over the next few months to present a compelling case to ASIC for the need for scaled advice for the SMSF sector.

“We want to outline to ASIC what the real SMSF barriers are and what needs to be done to solve them. We will be in touch with members to discuss this process soon,” he said.