The ‘general advice’ business model appears to be emerging in Australia as a realistic option for more advisers, particularly for mortgage brokers and risk specialist advisers who have not passed the ASIC adviser exam.
Giving weight to the growing interest in a general advice business model has been the growth reported by the Australian Advisory group of AFSL businesses.
Speaking on behalf of Australian Advisory, adviser and mortgage broker, Tony Bice, told Riskinfo that a general advice model is now being considered by more mortgage brokers, where the complexity of the regulatory hurdles associated with their diversifying into qualified personal financial advice has historically prevented them from doing so.
However, according to Bice, a general advice business model is one which is considered to be more ‘achievable’ by more mortgage brokers who are seeking to expand their service offer to their clients and is also a model that many risk specialist advisers are now considering, as the 30 September 2022 deadline approaches in Australia for advisers who have not passed the ASIC adviser exam (see: Risk Advisers Still Don’t Know Options Beyond 2021).
Of the 882 advisers who qualified for the ASIC exemption to continue providing personal financial advice beyond 1 January 2022, approximately half appear to have since passed the ASIC adviser exam in the 2022 sittings, the last of which took place across July and August.
This means the advice sector is set to experience another significant drop in the number of advisers on ASIC’s Financial Adviser Register who will remain qualified to deliver personal financial advice.
…the largest general advice business in Australia
Under this backdrop, Australian Advisory states the licensee firms operating under its ownership, which include Consilium Advice and Life Plan FP Australia, now include around 100 general advice practitioners in their numbers, making it the largest general advice business in Australia.
The firm is offering both sales skills and technical masterclasses to any advisers considering the option of a general advice service model as the industry also awaits both the outcome of the Quality of Advice Review recommendations as well as the rules under which the Government’s Experience Pathway proposition for 10-year advisers of good standing will eventually operate.