2023 compliance data suggests a maturing advice landscape whereby focus is shifting from product driven to process-driven advice.

When considering regulatory reforms in financial advice, it's critical to look beyond anecdotes and delve into solid evidence. The “Quality of Advice Review” is a prime example where well-intentioned proposals may inadvertently compromise the advice profession rather than enhance it.

Assured Support have reviewed over 19,537 client files across 208 Licensees, and this provides us with both a different perspective and a unique dataset that sheds light on the real issues.

Our 2022 data shows that, contrary to the popular narrative, the mandatory content of Statements of Advice (SOAs) isn't the root cause of non-compliance.

In fact, our analysis reveals that the pivot from recommending financial products to providing holistic solutions is still a work in progress.

In addition, it supports the proposition that engaging an effective paraplanner, one who supports and works alongside an adviser, would be the most effective, and cost efficient, path to quality advice (and the solution to common compliance failures and quality issues).

The 2023 data reinforces many of these observations but, critically, also suggest a more mature advice profession.

While advice process failures still dominate, advisers materially improved their discovery processes. They also got significantly better in explaining their recommendations and linking these with the clients’ relevant personal circumstances (although they struggled with considering alternatives).

So what does this mean?

Key Insights:

• Collaborative Practice: An effective paraplanner is a game-changer. Working in tandem with an adviser, they form a dynamic team that produces high-quality advice and navigates compliance smoothly.

• Process Over Product: The 2023 data suggests an evolved advice landscape. There's a noticeable shift from product-focused failures to process-oriented successes.

•  Client-Centric Documentation: Advisors have improved in personalising advice but still struggle with presenting alternative solutions.

SOAs are often (legitimately) criticised for being dense and costly, but they are not the inherent problem. The consistent issue observed are advisers’ failures to demonstrate acting in their clients’ best interests—this is less about ticking boxes and more about evident competence and genuine client engagement.

Shifting Focus:

• Beyond Disclosure: It's crucial to transition from a disclosure-focused approach to one that emphasises thoughtful consideration, clear explanations, and tangible outcomes.

• Cultural Change: The pathway to resolving compliance challenges is not just procedural but cultural. It's about cultivating an ethos where the client's needs are at the heart of every piece of advice.

Removing or simplifying SOAs won’t inherently lift advice quality. The true remedy lies in fostering a culture where paraplanners and advisers prioritise clarity, context, and the client's best interests above all.

Assured Support has consistently championed this cultural shift towards elevated advice quality. We invite you to see more about how our insights can empower advisers and paraplanners to be at the forefront of delivering exceptional advice.

Sean Graham

Assured Support

www.assuredsupport.com.au

Consigliere to advice professionals. Helping Advisers and Licensees to move beyond compliance and respond better to complexity, uncertainty and change. Reg-tech pioneer. Managing Director of Assured Support and architect of the [complye] compliance platform. Lawyer. Strategist. Author. Presenter. Commentator. @4greatadvice.