Levy ‘very nervous’ about what’s coming following ASFA reveal

On Thursday, ifa broke the news that Financial Services Minister Stephen Jones will be unveiling the government’s response to the Quality of Advice Review (QAR) to a small audience of superannuation fund CEOs and senior industry executives on Tuesday morning at an event organised by the peak body for the super industry ASFA.

Speaking at the ifa’s Adviser Innovation Summit in Sydney on Thursday, Ms Levy said that while she thought she “had an idea” about how the minister was feeling, the current circumstances surrounding the release of the response have left her with a strong sense of unease about what lies ahead.

“I am very nervous about what’s coming,” Ms Levy told a full room of advisers.

“I thought I had an idea ... Now I’m seeing how it’s being released, I do think it’s largely going to be about super … It’s a funny place to announce it though, to the CEOs of super funds.”

As per the ASFA invitation sent to CEOs and senior executives, and seen by ifa, the intimate room of high-level managers will be the first to hear the government’s QAR response.

ifa also reached out to ASFA where a spokesperson confirmed that the event would indeed serve as the platform for the minister to unveil the response.

Minister Jones has previously been criticised by advisers for enjoying a seemingly close alliance with super funds.

Speaking at an Industry Super Australia event earlier this year, the minister gave a firm indication that he is leaning towards heeding Michelle Levy’s recommendation to up the role funds play in the financial advice space — a proposal that has received a frosty reception from advisers.

“There are 16,000 licensed financial advisers in the country, so the numbers don’t square. So, we’ve got to find a way to deliver information and advice to members who are approaching retirement,” Mr Jones said at the time.

“Whether you like it or not, one of the first phone numbers that they call is their superannuation fund. At the moment, law that has been passed by the previous parliaments, supported by me, puts an obligation on funds to put in place a strategy for their members for their retirement phase. And at the very same moment, we put in all of these obstacles, which make it almost impossible for the funds to do anything about that. So, I’m keen on squaring that off,” he explained.

This, however, is not the first time Mr Jones has dropped such hints. In March, he confirmed he was seriously considering allowing entities other than relevant providers — professional advisers currently registered as such — to provide advice.

As part of the QAR, the reviewer, Ms Levy, recommended the removal of obstacles that prevent super funds from providing more retirement advice to their members.

Under her proposal, super funds would be able to offer limited personal advice while adhering to the good advice duty. However, murmurs have indicated that minister Jones is not particularly supportive of Ms Levy's good advice duty.

Touching on this on Thursday, Ms Levy said that failure to adopt the duty would put super funds in a "really, really difficult position".

"I think they are already with that intra-fund advice because of that issue they've got between what can be conflicting duties."

Ms Levy has previously highlighted the existing gap in the law regarding the conflict that arises when a trustee is tasked with balancing their duty to act in the best interests of both individual members and the collective members. According to her, the implementation of the good advice duty serves as a solution to this issue.

The minister has yet to answer ifa’s request for comment.