Speaking at the FPA Professionals Congress, in her final public appearance before she is due to submit her report to the government, the lead of the Quality of Advice Review (QAR) assured that non-relevant providers won’t be stepping on advisers’ toes.
Ms Levy doubled down on her belief that advice is episodic and that a diversity of providers, including banks, superannuation funds and insurers, should be allowed to provide it.
“This is intended to help you do your job,” Ms Levy told the advisers at the FPA Congress.
“I know that people worry about other people giving advice, but I just say don’t be worried.
“You have much more flexibility to go about exercising your profession in the way that you think is best for your clients.”
Ms Levy explained that by including non-relevant providers under the ‘good advice’ umbrella, she is enhancing consumer protections.
“One of the things that worries me a lot is not what you’re doing as financial advisers, but what people get every day when they speak to a financial institution and what they get is often very unhelpful general advice. And so, my proposal in the paper is that all personal interaction will be treated as personal advice,” Ms Levy said.
“You need to then adjust the duties that apply to that personal advice and again you’ve got to look at the full universe of people that will be giving that advice and I think it does need to be people’s financial institutions.”
This proposal, she noted, will not change.
“I don’t think all advice requires a professional,” Ms Levy added.
Delving deeper into how her ‘good advice’ model will govern this space, she explained that the ultimate responsibility will sit with the licensee and not the individual employee providing the advice.
“A really important part of the proposal is that obligation, when it’s not a financial adviser, to give good advice is not going to sit with the person at the other end of the phone, the obligation will sit with the licensee,” Ms Levy said.
Using an insurance company as an example, she said “it’s their job to work out what advice they are confident can be provided by their staff”.
“I expect that they would only be happy to give extremely limited and narrow advice without having a financial adviser.”
Levy says ‘not many’ surprises in final report
Overall, Ms Levy said she is “feeling more optimistic” about her final report.
Although she doesn’t know when the government will release the report to the public, she promised that “there won’t be many surprises there”.
“I don’t know when the paper will be released. I hope, quickly, but there are not going to be many surprises in there. I’ve been quite open about what I’m recommending,” Ms Levy said.
“I think in the main there is support, I know I have heard that there are some concerns, but I would ask everyone to sort of step back and look at the whole and say, ‘Is it actually good as a whole?’ And if it is, then encourage everyone you know to be saying that.”
Ms Levy does believe that among her proposals, there are some quick wins. These, she said, include changes to fee disclosure and the removal of statements of advice.
“So, statements of advice, removing the requirement for fee disclosure statements, I think they could be done very quickly. They are crossing something out. Again, I certainly think fee disclosure is not controversial. I don’t think anybody has spoken against it. The same with statements of advice, people don’t want them either,” Ms Levy said.
Ms Levy is expected to submit her final report to the government in the next three weeks, but the government has yet to confirm when its evaluation will be made public.
Can’t wait to see her explain what good advice is and who will be regulating it.
We might as well go into realestate and start providing financial advice.
These are good proposals. Can everyone just calm the farm. Financial Planner and Financial Adviser remain restricted terms and the barriers to entry to be one remain high only open to those who have higher quals and standards = professionals. Consumers will work out the difference and any issues from product flogging will be for the product pushers to worry about. I for one don’t want to provide industry fund comparisons for people to consolidate into one or the other – let the industry funds do that. Or comparing IP contracts. That is not the future of financial planning.
I think that view is a bit naive considering the past experience with product providers providing advice. And not so sure consumers will know the difference between advisers… they just get advice and if its bad then they think all advisers are bad. Even ASIC’s own research shows that consumers don’t always know what constitutes good advice.
So your future of financial planning is not to provide any insurance advice to clients? I would suggest you are leaving your clients highly exposed and you are at risk of failing your best interests duty.
That is not at all what the person is saying.
just like consumers clearly understood the difference between general advice and personal advice.
“Good advice”. Hmmm. I’ve heard that idea before. Oh, yes, ASIC in the late 90’s. That’s 1990’s for all you young things out there. ASIC’s catchphrase was “Good advice is compliant advice”
Full circle? No more like spiralling out of control.
I shouldn’t be worried. Too right. I won’t be here long enough to be worried.
Paul Tynan’s view reported the other day, reflecting on the financial advice industry over the last 20 years was 100% correct. The Banks and Super Funds have held the power balance from the day they both started offering advice, and today that hasn’t changed a bit. Financial Advisers have zero influence. The agenda in this QAR was there from day 1 and the submissions are merely for appearance only. The really sad and frustrating thing about this is that the advice Industry in Australia will never be a true Profession, whilst the balance of power sits with the big end of town. There is only one way of having any sort of voice and that is to let Minister Stephen Jones know that any move to halt the progress of Professionalism of Financial Advice (including allowing Banks and Super carve outs) will mean Labor will be shown the door next election. That is the only option.
Two steps forward, 3 steps back. The sooner product pushers are removed from the advice industry the better.
Reading between the lines – Treasury has provided Levy with a clear objective – “get the Banks and Super Funds back into the advice space, and soften the blow to advisers by removing a ‘lil red tape” as a trade off. All discussed at Catalina over a few King George and Moet….
Agreed, Treasury appears to be a major issue and potentially acting well beyond there scope – for reasons yet to be revealed.
“Ms Levy is expected to submit her final report to government in the next three weeks, but the
government is yet to confirm when its assessment will be made public”
The government should just file her report
under R for rubbish because it will be full of trash!
At least ban them from selling their own products…..thats the root of most problems.
At the behest of the Big Banks, this was always the plan from Josh Frydenberg and Jane Hume.
Get rid of most of the financial advisers, bury the remaining ones under new taxes and red tape, and let the Banks and super funds provide the advice directly without the compliance burdens.
Peter Johnson from the AIOFP is the ONLY member association calling this out from word for.
“Using an insurance company as an example, she said “it’s their job to work out what advice they are confident can be provided by their staff”. “I expect that they would only be happy to give extremely limited and narrow advice without having a financial adviser.” You cannot be serious…surely not…for real???
Another golden opportunity to transform the advice landscape for once and all, down the gurgler again we go. Oh well,
maybe in another 10 years, or not…
There is nothing like uncertainty to encourage people towards the exit door. This will be really bad for the educational pathways towards so called ‘Professionalism’. The really devastating thing about what Levy is proposing is a massive stab in the back to all those advisers out there that have done absolutely everything they can to complete all of the educational requirements mandated and more, towards the Industry finally being recognised as a Profession, and now Ms Levy’s proposal intends to unwind all of the positive improvements made over the last decade. It beggars belief just how influenced and controlled by the heavy weights this Industry really is, truly shocking and indicative of how Australia is being controlled and manipulated by the powerful.
And that comes as a surprise to you?
“I don’t think all advice requires a professional,” Ms Levy added. Wow! just wow! This has to be the financial advice landscape statement of the decade.
Here’s a thought – with the proposed carve-outs, removal of SOA’s, ROA’s, FDS’s etc. – will ASIC make the new QAR legislation retrospective? Like they did after the RC??? and then remediate all the advisers for poor and unlawful application of the law?
At least don’t call these pretend financial advisers/planners that work at the bank, super fund and other product providers so that we are not dragged through the mud when this all goes to crap. We have all been there done that and don’t want to be apart of this again.
Why even bother to read the report? The outcomes had a clear agenda from day 1. Complete waste of our time making submissions that were never even considered, read, or even on the radar. And advisers have had to deal with conflicts from day 1 until we all turn grey, but here we are, unsurprising but another heavily conflicted review. And guess what? Who are the biggest losers? again…
“I think in the main there is support, I know I have heard that there are some concerns, but I would ask everyone to sort of step back and look at the whole and say, ‘Is it actually good as a whole?’. And if it is, then encourage everyone you
know to be saying that.” Translating what she said behind closed doors to her clients: “Don’t worry, you guys the Banks and the Industry Funds will be back in the game, I assure you”.
“Ms Levy doubled down on her belief that advice is episodic and that a diversity of providers, including banks, superannuation funds and insurers, should be allowed to provide it”. The mere fact that she’s doubled down after the recent backlash confirms what every adviser already knows….
Hello…hello….is that Kenneth Hayne ?
It’s IFA here….we were just wondering if you would be kind enough to answer a few questions in relation to Michelle Levy’s proposals in relation to the QAR ??
“I know that people worry about other people giving advice, but I just say don’t be worried”. Ok, sure, after every earlier piece of legislation that advisers have been subjected to over the last 10 years, media bashing of advisers, ASIC scrutiny and shocking culture against advisers, compliance audits looking back 10 years, appalling bad remuneration of FFNS agenda, advice business’s blown apart, 30 plus advisers suicides, Insto’s inflicting and blame shifting like never before, sure Ms Levy, why should we worry…
” I don’t think all advice requires a professional ” !!!!!……isn’t what the whole mess of a process has been about??
So, Michelle, if I want legal advice, I can pretty much go down to my bank and everything should be just fine because I probably don’t have to engage a costly Lawyer.
Then, when I want another episodic advice experience, I can just go back to the bank for some Accounting advice too!
I don’t think I can truly believe what I’m really hearing here.
The solution really is this simple – Remove the red tape.
Not so simple if they can’t see the red tape.
Ok levy states all advice is personal while also stating that not all advice requires a professional. How this is determined seems entirely devoid of objective standards…. Other than revenues or FUM?
In other words, “Let’s throw consumers to the wolves and hope for the best”. Most idiotic and damaging move so far, no wonder we are leaving the industry in droves. Never mind, I feel like giving medical advice…. and as we don’t have enough qualified Dr’s what’s the harm it can do.
Financial Planning students will be glad they do not have to learn how to complete a statement of advice anymore, and we can simplify the assessments for financial planning degrees. Although I do wonder if a financial planning degree and passing professional exams is really necessary to provide “good advice”? It might be simpler to go and work for a bank and/or super fund instead, as it would be less risky from a legal liability perspective as it is back to institutional accountability rather than individual accountability, and the focus can be purely on product sales advice?
IMO it appears that Federal Treasury official/ASIC have managed the exit of Financial Planners and tied the remaining in red tap – leaving the majority of Australians retail clients to get product sales from Product Providers – and massively increased FUM – but I could be wrong. I guess well done to Labor/Union Super – the Super War has been won?
LOL do they truly understand what they are doing
100% on the money again, Dr Angelique McInnes. If only you were on the QAR instead of….
I’ve never understood asking for submissions, the report was written months ago. Banks and super funds will have all the rights and none of the obligations. This profession is a joke and it’s time for me to leave
Agreed!!! The QAR and proposals to allow Banks and Super Funds back in will decimate what little credibility remains. And like all previous reviews, legislation, FOFA, RC, Hayne etc. they all start with a so called ‘person of authority and standing’ that has zero idea of the longer term consequences of their proposals because they do not understand the advice profession, nor advice, from both an adviser and consumer needs perspective. Just being appointed to review something important does not mean you have the knowledge, experience and understanding, let alone the capability.
Welcome back to the wild west, but as she said, “I know that people worry about other people giving advice, but I just say don’t be worried.” i am going to use this quote to my AFSL & PI Insurance and see what they say WTF
So product providers incentivise their ‘sales people’ (aka call centre admin staff) and you don’t think that is conflicted remuneration. You’re putting the Fox in charge of the Hen House and Royal Commission Mark II will hang out all the dirty washing again. Mark my words
I don’t think all advice requires a professional is what Levy has just said in this article. Isn’t this what the industry has strived for Ie professionals giving personal/good advice. Why did we have to pass FASEA & go through the education requirements when according to Levy you do not need to be a professional. What a joke this is & a waste of time.
The thinking is only from the perspective of how we allow Super funds to provide advice.
It’s like there are not enough Australians getting Medical Advice because the Doctors are bogged down in red tape, having clients sign many forms before paying, write statements of Medical Advice, saying what the treatment is and what the implications are, full details of costs, benefits, and at least two alternative treatments and drugs…….so here’s a solution, let’s make it easier for Drug Companies to provide advice directly, without all those requirements, and we’ll let them decide what they’re comfortable having there untrained, uneducated, “sales” reps prescribe. So you Doctors…you don’t worry about that because it will benefit you.
Yep. That is a perfect analogy. Rather than fixing bad regulation preventing professionals from giving advice, just allow amateurs and those with commercial conflicts to fill the “advice gap” created by that bad regulation.
Well said.
Haha great analogy!
I am going to start giving out law advice without qual or a law degree now
backpackers can now give financial advice wow. lawyers do represent criminals might be hard for them to consider ethics now
Must be a lot of Product Providers very pleased with Michelle – would that be good for Levy’s career prospects going forward?
Many of which have been provided legal advice by Levy’s employer, Allens (as per their website).
Yes, she’s likely to get some new clients from this