Following RDR and the Australian FoFA, what can we learn when it comes to serving the mass markets with financial advice?

1. iress.com
Looking overseas
to fulfil the advice
gap conundrum
Mark Loosmore - Executive General Manager Wealth (UK)
December 2015

2. Introduction
1 2 3 4
FOFA
The Australian RDR
Impact on
the Australian
advice market
The role of
technology
Learning
points

4. We had the RDR 1st January 2013
Transparency & clarity
Independence
Proposition
Pricing
Professionalism
Qualifications
CPD
Access
Simplified advice
Removal of bias
Commission ban
Sunset clause
Overriding Goal
A properly functioning
market for financial
advice

5. OK, but with one exception
Transparency & clarity
Getting there
Professionalism
Better than expected
Access
Not good
Gone backwards?
Removal of bias
Good progress
Overriding Goal
A properly functioning
market for financial
advice

6. Of course, there are differences
‘Super’ vs Auto-enrolment
• Longer track-record of
auto-contribution
• Higher contribution rates
(AUS currently 9.5%, UK 2%)
• Bigger pots
More concentrated advice market
• Bigger “Licensees” (advice firms)
• AUS has approx. 20K advisers
servicing a population of 23M
• UK has approx. 28K advisers
servicing a population of 64M
64M23M
PopulationPopulation

7. Of course, there are differences
More joined up processing
• More point-to-point integration
fewer comparison portals
More politically charged
• Australian Labour government
64M23M
PopulationPopulation

8. So, in Australia they had FOFA
Transparency & clarity
Best Interests
SOA
2 Year ‘Opt-in’
Professionalism
Didn’t tackle
Access
Scaled Advice
Removal of bias
‘Conflicted Payments’
Ban
The Future of Financial Advice - 1st July 2012
Overriding Goal
A properly functioning
market for financial
advice

9. OK, with major exceptions!
Transparency & clarity
Went too far?
Professionalism
Didn’t tackle
Access
Not resolved but giving
Scaled advice a go!
Removal of bias
Good progress
Overriding Goal
A properly functioning
market for financial
advice

10. Where are they post FoFA & RDR?
Australia United Kingdom
Scaled advice (simplified process) Self service
Integrated technology Large components
Process re-engineering Functions re-engineering
Banks as the main distributer Withdrawal of banks (poised to re-enter)
Unified technology platform Channel specific platform
Vertical integration High level independence

11. What can we learn?

12. What can we learn?
And, technology can make it streamlined
Regulation can improve an existing advice market
But, regulation can’t create demand

13. What can we learn?
People are the same the world over
(human behaviour is common)
We need to find ways to “engage” the mass-market
We need to learn how to use technology
to facilitate that engagement
Unified platforms can deliver consistent
client experiences and efficiencies

14. Conclusions

15. Conclusions
Two countries, very different in many ways,
but the advice markets are running fairly parallel
Australia slightly ahead because of
the money invested in Superannuation
Common need to increase access being driven though technology
routes… but in harmony with face to face

17. Thank you
iress.com
Email: mark.loosmore@iress.co.uk
LinkedIn: https://uk.linkedin.com/pub/mark-loosmore/5/56a/461
Twitter: @mloosemore
Mark Loosmore