Minister for Financial Services Stephen Jones released the QAR final report on Wednesday morning. The report contains 22 recommendations, but the government is yet to publish its assessment.
FPA chief executive Sarah Abood said the government must act quickly on the report to clean up the current regulatory framework, which she said is complex, hard to understand, and costly to comply with.
“Too many Australians are currently unable to access the quality, affordable advice that they need. This is in large part due to the onerous and sometimes contradictory requirements that have been imposed in recent years, and which are acknowledged in the report as not meeting their goals,” Ms Abood said.
“Ms Levy has consulted widely with advisers as part of her review of the law, and it’s clear she has heard the many concerns expressed. She believes, and we agree, that significant changes are needed to the way advice is provided in order to meet the needs of Australian consumers.
“She has also been consistent in recognising that financial advisers and planners are professionals and should be recognised and treated as such under the law, that quality financial advice is important and valuable, and that more Australians must be able to access it.”
Ms Abood added that the FPA was particularly in favour of simplifying ongoing fee arrangements and enabling advisers to consult and agree with clients on how they would like their advice to be delivered.
“The FPA has been working with members for many years on improving ways to deliver advice, including innovative and more client-friendly initiatives such as video statements of advice (SOA). We are pleased Ms Levy has come to a similar conclusion about the issues with the current SOA regime,” she said.
“These changes would allow financial planners to speed up the advice process and give consumers more relevant information, also offering the real potential to meaningfully reduce the costs involved in providing advice.”
The FPA also provided what it believes are easy wins for the government to implement quickly.
“Minister Jones has previously stated that he was looking for ‘quick wins’. We believe that recommendations eight (simplifying ongoing fee consent), nine (removing overly prescriptive requirements on how advice must be presented to clients), and 13.7 (maintaining the ability for clients to choose how they pay for life insurance advice) are quick wins,” Ms Abood said.
“These recommendations are broadly supported across the sector and have the potential to quickly improve consumer outcomes. They will also enable financial advisers and planners to provide advice more quickly and lower the costs involved in doing so.
“There are many other recommendations in the report, and we welcome the opportunity to consult with government on these. Our goal is to help ensure consumers can receive high quality financial advice that will secure their financial futures.”
Ms Abood also urged cooperation from both sides of politics for the benefit of the entire industry and in order to make financial advice more accessible to Australian consumers.
“We are hopeful that the changes can be finalised after consultation and legislated with a bipartisan approach. The previous Coalition government recognised the problems with the current regime and instituted the Quality of Advice Review, selecting Michelle Levy as the reviewer,” she said.
“The current Labor government has also recognised the issues, endorsed the review and its terms of reference, and supported Ms Levy continuing in the role.
“A healthy and trusted financial sector is critical to the Australian economy and to the wellbeing of consumers and we hope that our parliament can come together to make the much-needed changes.
“The FPA looks forward to working with government and the regulators to make the Quality of Advice review a success. We thank Minister Jones for his work in this area and his belief in the future of financial planning.”
In December, the FPA urged Mr Jones to act quickly to reduce the regulatory burden advisers are under.
Wow… as an FPA member I’m shocked…. FPA have really showed whom they represent, clearly the big end of town and now Super funds…. for such a radical approach they haven’t even consulted with members.
FPA you sold us down the river. One set of watered down standards for super funds and banks, onerous requirements of best interest and education for real advisers. This is why I would NEVER give this mob a cent of my hard earned money.
And what of the 10000 advisers who have left the profession because of the draconian education standards? I guess they can all go work for the Super fund now??
FPA just trying to stay relevant at this point
And “crickets” from the FPA re super fund desk jockeys providing advice to members????? Herein lies one of the biggest Conflicts of Interest!!