Regulatory Pressures & Industry Response
The ongoing debate about the Compensation Scheme of Last Resort (CSLR) intensified this week, with the Self-Managed Super Fund Association highlighting the "significant flaw" of excluding managed investment schemes from the scheme. This comes as the Financial Advice Association Australia (FAAA) published recommendations for improving the CSLR, amid continued frustration with Treasury's reluctance to fully address Senate questions about the scheme's impact on advisers.
In a positive development for the profession, industry bodies are making the case for adviser access to the ATO portal, with both the FAAA and SMSF Association emphasising that the benefits would outweigh the costs. The SMSF Association described this access as "critically important" for enhancing client service delivery.
Industry participants also received a warning about potential regulatory developments, with the Financial Services Council cautioning that upcoming cryptocurrency regulations could strain already stretched advisers. Meanwhile, ASIC has banned a former Northern Territory adviser for seven years following a dangerous drug conviction, reinforcing the regulator's focus on maintaining professional standards.
Practice Management & Growth
The advice profession continues its growth trajectory, adding 100 advisers in the first months of 2025, representing triple-digit growth for the year. This consistent expansion builds on the stabilisation we saw throughout 2024, as highlighted in the Australian Financial Advice Landscape Report.
In major corporate news, AMP's former licensees have rebranded as Akumin, marking a significant milestone in their evolution after departing the AMP umbrella. The newly named Akumin group signals a fresh start for these businesses, while Entireti has unveiled its joint venture branding, highlighting continued consolidation in the licensee space.
AZ NGA has secured a $345 million investment from a global asset manager in another significant development, while Oreana has partnered with Encore Advisory to enhance its advice and equity capabilities. These investments signal strong confidence in the sector's growth potential.
Meanwhile, Count's CEO has highlighted the high cost of scale for AFSLs, offering insights into the operational challenges facing licensees in the current regulatory environment. For practices considering their future, a timely guide on how to be sale-ready has emerged as M&A activity continues to drive industry consolidation.
Client Engagement & Retention
Colonial First State has launched a $350 aged care advice offering, expanding its advice capabilities in a crucial area for aging clients. This initiative reflects the growing recognition of aged care as a specialised advice domain requiring dedicated expertise.
A concerning trend emerged regarding women and financial advice, with Fidelity research revealing that the cost of financial advice holds back 50% of women. At the same time, other studies show that women feel less prepared for retirement than men. Despite these barriers, research indicates that women seek financial advice to feel in control, highlighting the opportunity for advisers to address this underserved demographic. The Financial Standard reports that the industry must do more to improve women's financial literacy, with three in five women lacking retirement confidence.
A thought-provoking piece on serving neurodivergent clients offers practical guidance for advisers looking to expand their client engagement capabilities, emphasising the importance of tailored communication strategies.
There's encouraging news for high-net-worth advisers with reports of increasing HNWI numbers in Australia, creating additional opportunities for specialised advice services.
Technology & Innovation
The advice technology landscape continues to evolve, with Intelliflo introducing AI-driven file notes through an integration with Paradino. This development aligns with broader industry discussions about the role of AI in enhancing practice efficiency. However, another report suggests that large financial firms are falling behind on AI adoption.
Briefcase has enhanced its portfolio performance tracking capabilities, while an intriguing article explores whether digital advice could make provisional year advisers more profitable, suggesting potential synergies between human advice and technological capabilities.
Cybersecurity remains a priority, with HUB24 Group launching a cyber security education resource to help advisers protect their practices and client data. This initiative comes as the FAAA urges ASIC to check AFSL PI status annually, highlighting the interconnected nature of technology risk and professional indemnity requirements.
Looking Ahead
As we move further into March, several key developments warrant attention:
- The progression of Delivering Better Financial Outcomes (DBFO) Tranche 2, with reports of delays due to Cyclone Alfred
- Ongoing discussions about the CSLR's structure and funding model
- Industry efforts to improve financial advice accessibility for women
- Continued technology integration, particularly AI-driven solutions for practice efficiency
Key Takeaways for Advisers
- Explore targeted offerings for women clients, addressing cost barriers and confidence issues.
- Consider specialisation in aged care advice, following CFS's lead in recognising this as a growth area.
- Review your practice's AI readiness, as integrating these technologies becomes increasingly important for efficiency.
- Evaluate your licensee's value proposition in light of ongoing consolidation and investment in the sector.
- Engage with industry advocacy efforts around CSLR and ATO portal access as these regulatory issues evolve.
The profession's growth trajectory remains positive, but addressing accessibility challenges—particularly for women—presents both a moral imperative and a significant business opportunity. As we celebrate International Women's Day, the industry's focus on gender parity in financial services isn't just about equality—it's an economic imperative for sustainable growth.
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