AMA: I'm Phil Anderson, GM Policy, Advocacy & Standards at FAAA, Ask Me Anything!

Thanks Darren. Yes this regulatory change process is slow and frustrating for those watching from the outside. I have been involved in regulatory change for over a decade and know that it takes time, and also appreciate that it is important to get it right the first time. It was nonetheless important to get the DBFO Tranche 1 changes passed, and this should give us confidence that the Tranche 2 reforms will be delivered. I like to remain optimistic about the future, and hopefully that is how it plays out.

In terms of business improvement, I think that regulatory change is critically important, however there is much more that can be done to deliver greater efficiency.  The people that I talk to describe the huge difference between those practices who have good processes and those who don’t. So, I would like to say that regulatory change is not the only way to achieve real improvements. What practices need to be targeting doing is serving more clients with the same fixed cost base and reducing the cost of providing financial advice.

I think that there is an interesting debate underway as to whether there is a maximum number of clients that any one adviser can service. Some refer to the Dunbar principle which would suggest a limit of 150. Others suggest that with the benefit of technology, advisers should be able to service a lot more. This will be an interesting debate to watch play out.

I think the removal of FDSs, the rationalisation of the BID and removal of the safe harbour and the rationalisation of advice documents can deliver material improvements in efficiency. Along with technology and process improvements, I think these changes will be material.

In terms of timing, The ideal pathway would be for the legislation to be passed in early 2025, with a six to 12 month transition period.  So we might be looking at commencement in late 2025 or early 2026. Please don’t hold me to this timeline.