As we count down the few remaining days to the start of the Future of Financial Advice reforms it is timely to reflect whether the additional regulatory burden on advisers is likely to meet the reform objectives of improving the quality and access to advice for retail consumers. Some, me included, have been asking advisers whether they are FoFA ready? But this may be the wrong question to be asking.

One of the salutary lessons from the failures of the FSR regime was that building a massive compliance apparatus will add significantly to the costs of advice, yet make very little difference to advice quality.

Similarly, technology, processes and systems may be good for getting uniform solutions to consumers at a lower cost per transaction – but in the wrong hands – these tools tend to tailor the consumer to the product distribution solution – witness Storm Financial’s exemplary Statements of Advice.

Professional quality advice takes time. Time to deeply understand the client’s issues in seeking advice, time to properly scope the task at hand, time to bring the client to the necessary strategic solutions and to implement them, time to measure, review and test an applied strategy, and where necessary to adjust and adapt to changing circumstances. Experience delivering quality advice over time develops professional judgment – the kind of judgment that lets the experienced professional make calculated risks with a client to save time and cost, whilst still delivering professional quality advice. Can process and technology replace sound professional judgment when it comes to offering ‘scaled’ advice that still meets a statutory best interest duty?

Are we any closer as an industry to ensuring most consumers can expect to get professional quality affordable advice? Right now the professional planners I speak to are cautious but optimistic. They recognize that to extend the benefits of professional quality advice to middle Australia means they will need to take some risks under an untested regulatory regime. Legal advice on what will really be acceptable in the new environment can only be overly cautious and highly equivocal at this point. For example, we know that the statutory best interest duty is not intended to operate as a hindsight test once a client has suffered loss – but should be assessed in terms of the subject matter of the advice and the client circumstances at the time the advice is given. Many are wary of the claims experience under FSR where advisers have tended to bear the compensation burden for the negligence of other gatekeepers. There is a risk here that good advice retreats behind a wall of new compliance apparatus. Instead of a focus on quality we get a focus on the technical elements of the new reforms – fee disclosure and over-documentation ad nausea, etc. But many I speak to are quietly determined to overcome these difficulties to bring the benefits of quality advice to more Australians – recognising this is an important aspect of the public duty of the professional.

There are challenges too for the planner and licensee relationship as the risks shift towards adviser personal accountability for advice. What should you now expect from your licensee in terms of research and support around products? How robust is your licensee’s governance and product research process? Is your licensee prepared to dump the underperforming ‘house’ product or platform? Does your licensee remain tied to preferred (conflicted) product or service solutions? Is your licensee prepared to drop sales targets? Will product issuers, platforms, and dealer groups start to transparently disclose their interests and their conflicts so as a professional adviser you can properly assess how these conflicts potentially bear on your primary duty to your client?

What of your personal conflicts and the biases you bring to the advisory relationship? A new generation of financial planner graduates understands professionalism means professional objectivity.

As planners face into a new world without sales commissions, a world where the client alone pays for your professional services, there is optimism around professional membership. High educational entry requirements, adherence to a set of high standards, a willingness to submit to professional accountability – these are all hallmarks of an emergent profession. Wiser heads also know the protection offered in adherence to peer standards, rather than single licensee requirements – that ultimately it is these standards by which the courts and the EDR schemes will apply to nuance and test the real world of financial planning practice in the years to come.

The smart licensees are getting on board too – they understand the normative effect of professional standards on individual conduct, that there’s safety in committing to the standards of an independent profession and a reduction in the compliance burden when the individual has the right professional motivation to deliver quality advice.

On the regulatory front, ASIC’s leadership has started to recognize the value a committed professional partner focused on the individual professional planner can add to ASIC’s role with licensees in enhancing consumer protection co-operatively with the industry as a whole. The Tax Practitioner’s Board has also acknowledged the valuable standard setting work done by the FPA and has awarded professional body status.

The FPA has recently launch an update to its Professional code – designed to respond to the key FoFA challenges of best interest duty, scaled advice, conflicted remuneration and opt-in, setting the key professional expectations for professional financial planning in Australia for the years to come.

The opportunities abound to make the most of these reforms for the benefit of the Australian community. It is time for many more in our community to benefit from good financial planning advice from a qualified professional.