Simple, one-off superannuation advice is all that some people want and need.
The focus has been on how financial planners should be remunerated, but now the toing and froing will begin on what could be an equally big change for consumers once the Future of Financial Advice (FOFA) reforms are fully implemented: the clearing of the way for piece-by-piece or "scaled" advice.
Making financial advice cheaper and more accessible is one of the aims of these reforms, and this is where scaled advice will come in - allowing people to obtain piece-by-piece advice rather than having to pay thousands of dollars for a full financial plan or, worse, go without help.
The principle of scaled advice is that people should be able to pay for guidance in one particular area - such as insurance or consolidating multiple superannuation accounts - rather than have to go through a long, complex and expensive "holistic" process.
"Not everyone wants a 500-page 'statement of advice' telling them everything under the sun," says the financial advice leader at consulting firm Mercer, Jo-Anne Bloch, who's also a former chief executive of the Financial Planning Association.
That is why only one in five Australians receives financial advice, she says. "They're put off by the process."
Some industry super funds and other providers do offer "limited" advice already, but the federal government has said it wants to clear any remaining obstacles to more planners providing piece-by-piece advice.
Many advisers stopped providing such advice in 2006 after the Australian Securities and Investments Commission reviewed AMP Financial Planning's files and concluded there was often no "reasonable basis" for the advice provided. Planners became worried they could be held legally liable unless they did a full "fact find" so they could "know" the client.
However, the industry is not sure this problem has been solved by the legislation that went to Federal Parliament because of what some see as a potential conflict between providing limited advice and the new duty to act in a client's best interest.
The client may want one piece of guidance but providing that limited advice may not in fact be in their best interest, some advisers say.
Explanatory notes attached to the legislation do say that inquiries made by an advice provider can be "tailored to the advice sought".
CPA Australia's policy adviser for financial planning, Keddie Waller, says the aim of this statement appears to be to make it possible to provide scaled advice without falling foul of the duty to act in a client's best interest. But she notes that Treasury officials expressed a view in hearings earlier this year that an adviser would still have to make a professional decision that it was reasonable to provide advice to a client on only one matter.
"This would suggest a financial adviser would have to do a full fact find for the client so they could then decide ... In some ways, this would defeat the purpose of scaled advice and would only partially reduce the cost," Waller says.
The chief executive of the Financial Services Council, John Brogden, says: "We look forward to getting greater clarity from [ASIC] on scalable advice and working constructively with the regulator on the considerable regulatory guidance that still needs to be developed."
Some advice groups have already started down the path, however, and industry super funds have offered "limited" or "intra-fund" advice for some time.
Even before the FOFA legislation went to Parliament, AMP, for instance, had started offering advice "modules" in areas such as consolidating multiple super funds.
Bendigo and Adelaide Bank announced recently that new technology would give it the ability to offer phone-based scaled advice.
"We saw there was a lot of demand for what we call simple, low-cost advice," says the head of wealth markets at Bendigo Wealth, Alexandra Tullio.
MLC is also supportive of scaled advice. "Some people have the view that customers don't know what they don't know," says the general manager of MLC Direct, Greg Miller.
"But ... people make financial decisions every day of their lives without talking to someone else. If we can help the customer solve a particular problem they have, we should be able to do that.
"Of course, we'll tell them, 'You need to be aware of these things that could impact on you' and if they're concerned about any of these, our recommendation would be for them to get full advice."
It is akin to visiting a GP for a sore toe, Miller says. If it is just a sore toe, the GP does not need to run a gamut of tests if there is an indication it is something more complex, they will suggest a thorough investigation.
People can buy the advice they can afford under a scaled-advice model, Miller says.
A planner might identify a number of issues that would cost perhaps $4000 to work on, but the customer could choose to tackle the top-two priorities with the $1500 in their pocket.
Other planners see no profit in this approach, however. A survey of advisers by researcher Investment Trends found nearly 80 per cent of respondents wanted to refocus on wealthier clients, saying a third of their current clients were not profitable for them.
Consultant Jim Stackpool says this is why he expects the "big boys", such as banks and superannuation funds, to be the key players in the "consumerisation" of advice under a scaled system.
Howit might work
The rules covering scaled advice haven't been finalised, but a number of issues might be handled this way.
For instance, people with multiple super funds might want advice on which fund to roll all that money into.
A young couple might not be able to afford to buy a home in Sydney or Melbourne and want to invest instead. They might want some basic advice on how to start doing that.
People with families might seek advice on how much life insurance they need, or how to best structure income protection insurance.
Pre-retirees might want to know if their super is on track to fund a reasonable income in retirement, or at what age they could reasonably expect to retire, based on their super balance.
O Only one in five Australians receives financial advice.
O Scaled advice is on one issue, or just a few issues.
O It can be quicker and cheaper than holistic (comprehensive) advice.
O Theres debate about how to offer scaled advice under FOFA.