Advice without breaking the law

Politicians can give advice without being licensed and breaking the law. Here’s some advice by Victorian Liberal backbencher, Tim Wilson:

“Aiming to buy a first home and struggling to save the deposit? For 4 more days you may be able to access your super savings now to bring a purchase forward: earlier & cheaper. #HomeFirstSuperSecond – you’ll have a better life & a better retirement”. 

via Twitter, ref: Money Management 4 January 2020

The minimum fee to provide advice without breaking the law under FOFA and FASEA legislation is $3,000 or more according to new research by Consultants Business Health published in Professional Planner, 13 October 2020.

Amidst increasing compliance and licensing costs, a floundering professional indemnity market and the retreat of grandfathered commissions from advice revenue books, the figure of $3,558 represents the average level advisers need to be remunerated annually per client to run their business.

Now that FASEA legislation is in place it takes at least 40 steps to deliver advice and services without breaking the law.


Before an adviser even sees a client, they must be a qualified, licensed, ethical, trusted and experienced. The adviser’s qualifications must be verified otherwise they could be banned like Sam Henderson who provided false qualifications on his documentation. Office staff must also be supervised and adequately trained. All of this education, training and experience costs money.

The adviser must collect data and information above and beyond the information provided by the client and hold it privately but also be a detective to identify suspicious activities and sources of money. This costs money too, a lot of money (Xplan, data feeds, storage, etc).

Once the adviser has gathered the appropriate information and data, they must then decide if they are capable of providing the advice or service and seek the client’s Free, Prior and Informed consent in a Terms of Engagement to charge a fee to proceed with the service.

Up to this point, there are 25 steps involved without breaking the law!

Implementation and review…

The adviser’s office must be capable of handling depute resolution, insured and downtime to provide defensible, accurate advice and services in the best interests of the client without fear or favour.

There are a further 20 steps to provide the advice, obtain instructions to proceed and vary the advice if relevant circumstances have changed or the client does not accept all of the advice on offer.

Implementation, record keeping and oversight of the client’s position to justify the advice takes further 10 to 15 steps depending on the complexity of the client group and their extended family, estate and business interests, if any.

Joint Ventures…

The high cost of advice is unavoidable unless it’s subsidised by a profit sharing arrangement under a Joint Venture with another service provider or the government reduces laws and red tape. These Joint Ventures were given the tick of approval by FASEA in its FG002 guidance report dated November 2019, p.17

To make advice accessible to all Australians the associations representing advisers must have one message to Canberra to address laws and red tape.

You have my commitment as a FPA Board Member to address this issue after I was elected on 21 October 2020

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