Speaking at a recent Fidelity event, Fidelity portfolio manager Kate Howitt said that one of the things that must be addressed in improving financial outcomes for women is creating an effective model for scaled advice.
“The trouble is that in order to give financial advice, you have to do a full fact find process, and the numbers for that only stack up for people of a certain asset base,” said Ms Howitt.
“Sadly, women are going to be disproportionately outside of that cohort.”
Ms Howitt said this is another structural impediment being faced by women that needs to be discussed by the industry.
“The issue also is that scaled advice models elsewhere in the world are increasingly technology-driven. There’s a lot that you can automate now, but we don’t have the regulator framework for that yet,” she explained.
SMSF Association policy manager Tracey Scotchbrook said there is a strong need for affordable, quality scaled advice in the market, particularly for women.
Ms Scotchbrook gave an example of women needing advice following a separation, divorce or death of a spouse, in which case it might be better to receive it in stages.
“Scaled advice improves the affordability of advice at a point in time as the costs and advice services received can be spread over time,” she noted.
“However, due to the current complexity and layers of compliance an adviser must comply with, this may increase the total cost of the overall advice the individual will ultimately receive.”
Ms Scotchbrook said that advice needs to be addressed in a time frame that is suitable for the client and their circumstances, with more urgent issues addressed as a priority.
“Statistically, women are lower-income earners; however, this does not reduce the need for advice. Targeted, bite-sized advice can have an important impact on long-term financial outcomes,” she said.
“Whilst the gender gap on superannuation balances is reducing, women still statistically have lower superannuation balances than men. This means that women need to work smarter with their superannuation savings across their working lives and into retirement. Scaled strategic advice has a role to play in improving the financial independence and security for women.”
[i]”..many women finding it difficult to access advice due to the cost.”[/i]
I thought everyone was finding it difficult to access advice due to the cost, not just women. Isn’t this the focus of the latest in a long line of inquiries into the advice sector?
This is the result of government action. The ALP does not want competitors to the Industry funds. For decades it has pushed for restrictions on small businesses which help the poor at the expense of Industry Funds. The Nationals got tired of their constituents complaining about the Bank’s planners ripping them off. The Libs fell in with the Nats and allowed a Kangaroo Court (they called it a Royal Commission) to dictate policy which was pro-ALP and anti small business. Co-incidentally it is anti low income consumers. They do not care as long as the TV lets them get away with it.
Aren’t the massive over the top BS Regs and so called Consumer protection laws doing a wonderful job. NOT !!!
Consumers are so protected from Advice as it’s totally unaffordable, thus unattainable.
Great job Ms Hume, Frydenberg, LNP, ASIC, AFCA & Choice.
I know Ms Hume, why don’t they just go to the many financial scams on Facebook & other Finfluencers for free Scam Advice.
Could this mob have stuffed Advice anymore than what they have ???