On the latest episode of The ifa Show, Ben Marshan, director of Marshan Consulting, argued that advisers should be starting to implement changes where possible, rather than waiting for new legislation to fix their issues.
With the first tranche of the Delivering Better Financial Outcomes (DBFO) reforms passed a month ago and the second seemingly a long way off, Marshan said that given some of the coming changes are relatively predictable, advisers should focus on what they can do now.
“Waiting for the government to fix the law, waiting for big regulatory change like that is just waiting for nothing in my view … So, what can we do today?” he said.
Marshan argued that starting to implement changes now will allow advisers to understand how best to navigate the new processes before they become legislated.
“How can we start thinking about what we would do today to be ready for when that legislation happens? My thoughts and my recommendations would be: don’t be waiting. Don’t wait for the final information,” he said.
“We probably know 80–90 per cent of what it’s going to look like anyway. It’s probably 70–80 per cent of what we’ve got today anyway, just clearer law, better written, easier to understand what it means.
“The real magic is going to be, why are we doing this? Why are we doing it this way? Can we do it in a more efficient and engaging way today or when the laws pass? Start thinking about that.”
An example of this, Marshan said, is that advice firms still using the safe harbour steps can shift to the best interests duty compliance requirements, given that firms currently have the choice between the two and the safe harbour is expected to be removed in the second tranche of reforms.
“What we can do today already is go … ‘I can comply with the best interests duty. How do I create an advice process that ensures I meet the best interests duty today? How do I redo my business that complies and we can be ready to go in months?’ Not 12 months, two years, three years from now, when we’re waiting for this magic wand of the Quality Advice Review to be implemented,” he said.
“So, there’s a lot of those types of changes that have been recommended from Michelle Levy that we don’t really need to wait for, we can start doing today.
“SOAs are the same, whether it’s called a statement of advice or whether it’s called an advice document. The stuff that goes in there, if you put them side by side, is very similar. So whatever the legislation is, it’s not going to massively move the dial on what needs to go into an advice document.”
To hear more from Ben Marshan, tune in here.
