Speaking on a new episode of the ifa podcast, founder and chief executive of Advice Intelligence Jacqui Henderson said that the good advice duty, which was proposed as part of the Quality of Advice Review, is in line with advice objectives.
“I think at the moment, most advice businesses are providing good advice, and really strive to,” Ms Henderson said.
“I think having it fit for purpose benefits the client in terms of the scope and the context and the problems that the client is wanting to solve, and all the goals and objectives that the client’s trying to achieve.
“That is really the fundamental principle of what good advice should be. So, I’m definitely in support of the good advice recommendation.”
Ms Henderson added that she believes digital advice and the best interests duty can coexist.
“In terms of digital advice, it supports best interests, and whatever fiduciary duty that we want to put around that,” she said.
“I think that digital advice helps support that today. And I think it’s making that a lot less complicated for an advice business. So, I’m fully in support of the good advice aspect and making personal advice much more attainable to the wider consumer market.”
In addition to proposing a new statutory best interests duty, independent chair of the Quality of Advice Review (QAR) Michelle Levy backed the imposition of a separate “good advice duty” under recommendation four of her final report.
This new obligation, which would be enshrined in the Corporations Act, would apply to all providers of personal advice to retail clients.
Ms Levy previously addressed concerns that a prospective good advice duty would lower the quality of advice, due to misinterpretations of the “good” standard.
“A duty to give good advice is not, and is not intended to be, a duty to give ‘OK’ advice or ‘good enough’ advice,” she said.
“I think most people would agree that ‘OK’ and ‘good enough’ do not reach the level of ‘good’.
“Nevertheless, I understand that knowing what is good in a particular case might be difficult and so I do accept there is a need for a definition of good advice.”
The prospective duty would apply specifically to financial advisers, but in all other cases, would apply to Australian Financial Services Licence holders.
Ms Henderson and Advice Intelligence are part of the recently announced Australian Digital Advice Association (ADAA), aimed at advocating for change in financial advice regulation and improving the delivery of digital advice solutions.
The association’s founders — fund manager abrdn and firms Ignition Advice, moneyGPS, and Advice Intelligence — will join Adviser Innovation’s editor, Maja Garaca Djurdjevic, on a panel at this year’s Adviser Innovation Summit to discuss their goals, and how a unified and coordinated voice for digital providers can revolutionise the industry.
Speaking on the occasion, Ms Henderson said: “We are on the precipice of a new era for financial services, and I am excited to welcome this next evolution of financial advice.
“The digital advice landscape enhances the adviser and client relationship in significant ways that will benefit both consumers and the wider industry — improving the advice journey, building efficiencies, and bolstering business success.”
To secure your ticket to the Adviser Innovation Summit 2023, click here.
