The regulator undertook the consultation in November 2020 to seek input from financial advice industry participants and stakeholders to understand the issues and impediments impacting the supply of good-quality, affordable personal advice, and the practical steps that can be taken by ASIC and the industry to improve consumer access to the same.

“The response to CP 332 was unprecedented, with ASIC receiving 466 submissions from financial advisers, licensees, industry associations and relevant stakeholders. ASIC thanks industry participants and other stakeholders who took the time to make submissions,” ASIC said.

In the consultation, respondents had identified overheads and fixed costs, SOA preparation, and rising regulatory and governance costs as contributing factors to the cost of advice.

This also includes rising regulatory and governance costs and conservative licensee policies and procedures requiring compliance above what is required by law. One hundred forty-six respondents supported allowing greater use of ROAs.

Meanwhile, the biggest obstacles in providing limited advice were identified as too costly to provide, as regulatory requirements for comprehensive and limited advice are similar and concerns remain about meeting the FASEA Code of Ethics. Furthermore, some advisers are unclear about regulatory requirements for limited advice and advisers were found to be restricted from providing limited advice by licensee or other party.

A majority of respondents preferred the term “limited advice” and that common topics for limited advice were adequacy of insurance and super contributions.

Majority of respondents also felt strategic advice could benefit consumers, according to the ASIC feedback. One hundred thirty-eight of the respondents thought additional examples of giving compliant strategic advice would be useful. 

Key issues in providing strategic advice include uncertainty about legal requirements leading to concern about providing compliant strategic advice, licensees limiting adviser ability to provide strategic advice while more ASIC guidance is needed.

Meanwhile, of 215 respondents, 148 said they don’t provide digital advice and have no intention to due to lack of demand, consumer preference for human adviser and compliance concerns.

Based on those roundtable discussions, ASIC said on Friday (2 July) it has “identified a number of initiatives that may assist industry participants in providing good-quality, affordable personal advice to consumers” and intends to move forward with those initiatives.

“ASIC will continue to engage with industry on any initiatives to assist them with providing good-quality, affordable advice to consumers,” ASIC said. 

Following on from the feedback received in consultation in CP 332, ASIC said it is committed to working with industry on the steps that they can take to address the issues around providing good-quality, affordable personal advice. 

In April 2021, ASIC held roundtables with advisers, licensees and industry associations to discuss the key issues raised in their submissions to CP 332 and to consider potential solutions. 

The regulator said it will continue discussions with industry as initiatives arising from the consultation are developed. 

ASIC also aims to set out the actions it will take to help industry provide both good-quality limited advice and affordable personal advice more broadly.  

“Based on the feedback provided in the submissions to CP 332 and the roundtable discussions, ASIC has identified a number of initiatives that may assist industry participants in providing good-quality, affordable personal advice to consumers. ASIC intends to move forward with these initiatives as resources permit,” ASIC said.

“ASIC is also committed to passing on industry feedback to the government where relevant — for example, feedback on law reform. ASIC has provided industry feedback on issues relating to law reform to Treasury for consideration as part of the Quality of Advice review.”