In short

• The simple advice regime’s purpose is to make it easier and more affordable for more Australians to access financial advice. 
• In creating a new level of adviser, there is a risk of adding greater complexity.
• Australia is still some way from deciding on all the new model’s details, but discussions have begun.

In life insurance and other areas of insurance and financial advice, one of the most closely watched and potentially transformative developments is the introduction of the simple advice regime.

Following the recommendations of the Quality of Advice Review, a new class of adviser has been proposed in Australia — one who is empowered to provide scoped personal advice.

Their services will be less personalised and customised than those provided by full-service advisers and will be restricted to simpler financial products.

The proposal is in response to the fact that the cost of personal financial advice and the complexity of the regulatory environment have created a situation in which many Australians are unable to source and/or afford financial advice.

Based on 2020 member research from the Financial Planning Association of Australia – now part of the Financial Advice Association Australia – it costs an average of A$3,300 to set up a financial plan and A$4,300 per annum for ongoing advice.

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