A regulatory framework that empowers consumers to get limited advice on simple or basic issues is the “key outcome” that the Financial Services Council’s (FSC) is hoping the upcoming Quality of Advice Review (QAR) will achieve.
The FSC’s policy director, Zach Castles, said there are “three key changes” that will reduce the cost of advice by 40 per cent through limited advice.
“Firstly, the FSC seeks the removal of safe harbour steps compelling the consideration of consumer circumstances well beyond simple advice needs that will end ‘tick a box’ advice in Australia,” Mr Castles said.
“Secondly, documentation requirements should be simplified supporting a shorter Letter of Advice with obligations that can be scaled up or down in accordance with consumer need and the professional judgement of the adviser. Currently, there are entirely separate disclosure regimes for when you need advice and when your circumstances change despite the fact no advice need is the same.
“Lastly, all advice should be consolidated into personal advice where it considers the individual circumstances of the consumer, or general information where it does not.”
It comes after Nigel Baker, adviser and founder of digital advice solution Scientiam, called for advisers to unite submit a “considered, fact-based submission” to the QAR directly or in collaboration with a professional association.
“If advisers want to help more people, they must take the lead in showing the government and regulators how quality advice can be delivered differently,” Mr Baker wrote in an opinion piece published on ifa.
“They must build advice models and solutions that meet the needs of consumers.”
No Safe Harbour Steps (Best Interest Duties) should ever be tampered with. We didn’t do all the hard yards to have our Profession diluted for the benefit of Institutions and Industry Funds
THE FSC IS AN INSTITUTIONALLY ALIGNED ASSOCIATION THAT SHOULD STAY OUT OF ADVICE, REMEMBER THEY DELIVERED LIF/FASEA……IN CO OPERATION WITH THE FPA/AFA…….
…and failed to expel, condemn or punish any of its members for breaching the Council’s own ethical code in place at the time as evidenced by the Royal Commission. I encourage readers to have another look at the video of the FSC CEO providing evidence to the Royal Commission back in 2018.