The financial advice profession enters what some are calling the dawn of a "golden age," with adviser numbers continuing to rise and significant developments in education reforms, technology adoption, and practice evolution. However, challenges remain around regulation and industry oversight, particularly regarding the Compensation Scheme of Last Resort (CSLR) and ongoing reforms.
Regulatory Pressures & Industry Response
The Financial Advice Association Australia (FAAA) has stepped back from its ambitions to become the profession's self-regulatory body, marking a significant shift in industry governance. This comes as both major political parties signal support for removing risk commission caps, suggesting potential bipartisan reform ahead.
Questions continue to swirl around the CSLR, with industry leaders seeking answers about why Unlicensed Giving of advice (UGC) is the main contributor to the 2025-26 levy. The FAAA has also called for fixes to unreasonable product provider Customer Due Diligence (CDD) demands on advisers, highlighting ongoing operational challenges.
Regulatory scrutiny remains high, with ASIC announcing plans to target advisers over SMSF establishment advice. This follows data showing that advised SMSFs outperform non-advised funds by 1.6%, highlighting the value of professional guidance. The regulator also recently lost a wholesale investor argument due to lack of evidence, demonstrating the importance of robust documentation.
Practice Management & Growth
The profession continues its recovery, with a net increase of 87 advisers being added to the Financial Adviser Register already this year. However, concerns emerge as qualification deadline questions affect 12,000 advisers' FAR records.
Practice evolution continues with notable movements:
- Centaur Financial Partners obtained their own AFSL, demonstrating the ongoing trend toward self-licensing
- My Dealer Services expanded their service offerings
- Interstate expansion continues with several practices pursuing acquisition strategies
- Fiducian reported strong half-year results while addressing non-paying clients
Practice management expertise continues to evolve, with industry experts explaining why hiring a GM is necessary for growth. This reflects the increasing sophistication of advice businesses and their management structures.
Client Engagement & Innovation
Technology adoption accelerates as Bravura upgrades revenue guidance based on digital advice growth. A global advice software firm is looking to expand into Australia with the Saxo acquisition, potentially bringing new capabilities to the market.
Research indicates advisers must improve public awareness to win Australians' trust, highlighting the ongoing challenge of expanding advice accessibility. This comes as Allianz Retire+ calls for a shift in retirement income advice.
Innovation continues in specialised areas, with NowInfinity unveiling streamlined SMSF transfer capability for UK pensions, addressing a specific market need.
Professional Standards & Education
The industry has responded positively to recent education reforms, with associations calling them critical to the future of the profession. The TAL Risk Academy celebrates 10 years of supporting advisers, highlighting the ongoing commitment to professional development.
Professional conduct remains under scrutiny, with the Financial Services and Credit Panel (FSCP) de-registering an adviser for incompetence and another former adviser receiving a suspended sentence for dishonest conduct.
Notable Industry Movements
Key personnel changes this week include:
- Adam Webb's move from Counts to IRESS
- AMP reporting profit impacts from advice business changes
Political Landscape
The Chartered Accountants Australia and New Zealand (CA ANZ) have put accountant advice delivery at the top of their election wish list. At the same time, industry figures suggest the Delivering Better Financial Outcomes (DBFO) reforms are too modest. Some analysts suggest that DBFO could be "low-hanging fruit" for the next government.
Looking Ahead
Several key themes are emerging that will shape the industry through 2025:
- Education reforms and their impact on adviser numbers
- Technology adoption and digital advice evolution
- Practice consolidation and licensee movements
- Regulatory reform implementation
- Client trust and engagement initiatives
- Political developments ahead of the next election
Key Takeaways for Advisers
- Review qualification status ahead of upcoming deadlines
- Assess digital advice capabilities and technology stack
- Consider practice efficiency and growth strategies
- Monitor regulatory developments, particularly around SMSF advice
- Focus on building public awareness and trust
- Prepare for potential political changes affecting the profession
- Evaluate practice management structure and resources
The industry stands at a crossroads between traditional service models and technology-enabled future state. Success will depend on balancing professional standards with innovation while focusing on client outcomes and adapting to the evolving regulatory landscape.
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