The chief executive of the Financial Advice Association Australia (FAAA), Sarah Abood, has reiterated to ifa that the government is expecting to legislate the Quality of Advice Review’s (QAR) quick wins by the end of this calendar year.
As previously reported by ifa, the FAAA, among others, has been engaging in roundtables hosted by Treasury on each of the three streams that make up the government’s response to the QAR.
It is at these roundtables that, Ms Abood said, the government has reiterated its intention to release draft regulation this year.
“We’re still being given an expectation of draft regulation before the end of this calendar year. That would be really pleasing,” Ms Abood said.
She explained that the areas of QAR “garnering the most attention” are questions regarding the specific changes the government intends to make to statements of advice (SOAs).
Under stream one of the government’s QAR response, Financial Services Minister Stephen Jones said the government intends to scrap fee disclosure statements (FDS), while replacing SOAs with “fit-for-purpose” advice records. Also included in this stream is a pledge to consolidate the ongoing fee renewal and consent requirements into a single form.
“The government has said that they don’t agree with the recommendation to completely remove the requirement. That there should still be a requirement,” Ms Abood said.
“So, there’s been a lot of debate about what exactly that requirement would be and how can we give confidence to the sector to act to reduce and simplify SOAs, how can we be confident that ASIC will regulate in such a way that licensees feel comfortable in doing that.”
Another topic occupying the minds of the roundtable attendees is how to standardise fee consent.
“We’re keen for that standardisation to be technology neutral,” said Ms Abood.
“It doesn’t necessarily have to be a single form. It could be an electronic solution, it could be an app. We don’t want stifle innovation. We think digital is a great way. To sort of move towards those digital solutions is what’s going to take most cost out of adviser businesses and be more convenient for consumers.”
Despite ongoing discussion of these elements, Ms Abood said a lot of reforms in stream one “are fairly straightforward”.
“It ought to be, at least in theory, fairly easy to say you don’t need to do FDSs anymore, for example.
“It ought to be fairly easy to say you can disclose your FSG [financial services guide] on your website and that’s going to be OK. So, there’s a bit of a mixture of things that are really easy, you just author paragraph in this act and you’re done, and other things that require more thinking through.”
Ms Abood also shared that the FAAA is “very much” working with the joint associations on stream one.
“If we can have our arguments among ourselves and then put a singular position to government, then it does make the government’s job a hell of a lot easier.”
The fear, she noted, is that the more the associations argue, “the longer it’s going to take”.
“That thought is very much motivating the members of JAWG [Joint Associations Working Group]”.
Were able to legislate change reducing pds to few pages from 100. Follow the same formula, exciting
Could be a game changer for Advice in Australia and for clients too
Really looking forward to the legislation!
So 3 months to work out the all of the finer details and square it all away? It’s taken 9 months to read the QAR proposal and decide on the vague outline of the next steps for SoAs. SoAs should be fit for purpose. Ok? Glad we have cleared that up. Now what?
The horse has bolted on this and I for one will be very surprised if the end outcome is actually ‘fit for purpose’
Releasing draft legislation is not the same as “legislating”.
And they are not “quick wins” if they aren’t delivered until about 2 years after they were promised in an election campaign.
Stephen Jones’ “quick wins” are fraudulently named. Just like Jane Hume’s “Single Disciplinary Body” or HostPlus’ “Balanced Fund”
And wasn’t it Bill Shorten who said FOFA was to make Advice more affordable?
I feel like we are being drip fed that the QAR will be a next election issue. No quick wins. Lets all concentrate on are business and stop hoping for something that will not come.
This sounds a lot like LIF where the improved advice details were to come after the reduction in commissions and is still coming. Proof is in the pudding and I have a feeling advisers will like this as much as a foraged mushroom meal cooked in Victoria.
Wow, professional Financial Planners might get a new look SOA by Christmas – lucky present for being good and compliant I guess?
Super funds get advice with no SOA, ongoing fees with no FDS or opt-in – for what?
Follow Levy recommendations, no document unless requested. Legislation should address minimum standard only not best practice.
Impose a word-limit…. just like a uni assignment.
Draft only legislation by years end…….and then how much longer before Jones’ actually fixes the pre-election
” hot mess ” of Financial Services regulation ??
This could well be another 12 months away from seeing daylight in respect to implementation.
In addition, Treasury have forever been a thorn in the side of Financial Advisers in respect to legislation.
1.) Remove FDS completely. 1 universal form required to authorise fees.
2.) FSG should be on all advisers website for access.
3.) All SOA’s to not include appendix text. Super/Risk/Platform comparison tables all in file notes. No longer in the SOA. Remove all duplications of text. Remove all projections and keep it as file notes which can be requested outside the SOA. This should reduce the pages to 20-25.
Probably even less. I’d say 10-15 pages.
Draft legislation by “year’s end”? So,realistically, no law till mid 2024. So much for “quick wins”!