QAR (Quality of Advice Review) is about making financial planning advice affordable and accessible to ordinary Australians.
Qualified, licensed advisers have seen their numbers fall to nearly half as education and compliance requirements suffocate them and force up the cost of giving advice. According to Adviser Ratings, only 10.1% of consumers saw a wealth adviser in 2022, down from 13.9%, four years previously and the median ongoing fee has increased by 41% from $2,510 to $3,529. This is too expensive for most consumers especially as there are other costs such as implementation and fund management fees.
The QAR recommendations included letting banks push their products via staff (under the guise of affordable advice) allowing them to ignore the “best interests” duty as long as the advice is “good”.
Putting hard-earned money into an over-priced, underperforming product may be affordable at the beginning of the contract but costly in the long term. Consumer advocacy group CHOICE believe the QAR recommendations are a “recipe for another Royal Commission”.
The recent Royal Commission saw six of Australia’s largest banking and financial services institutions pay or offer to pay a total of $3.15billion in compensation, as at 31 December 2021, to customers who suffered loss or detriment because of fees for no service, misconduct or non-compliant advice.
What about the new kid on the block? How about this for affordable and accessible. I asked chatGPT3 (its the old free version);
“I have $300,000 in my superannuation and will retire in 10 years time with only employer contributions on a salary of $120,000 pa. I will need $60,000 a year in retirement. How long will my superannuation last?”
As you can see it is an immediate and detailed response. Because chatGPT-3 only knows stuff up to 2021 it gets the contribution rate wrong (it should be 10.5%).
Using ChatGPT-4 (with an account), this information would have cost a few cents. “Spinoffs” like Auto-GPT allow numerous tasks to be tackled consecutively (life goals?) and a little programming will enable it to be done by voice, including your voice (with a bit of training).
This isn’t “advice” because there is no product recommendation but most users would see a clear course of action. They can also get product information on demand.
It is affordable and accessible.