AFA list off multiple recommendations for change in QAR submission

The Association of Financial Advisers (AFA) has put forward a number of recommendations in its Quality of Advice Review (QAR) submission to Treasury this week, saying “fixing the problems in financial advice will require a number of material changes”.

In its submission, the AFA called for regulatory obligations for the provision of financial advice to be “proportionate” to the level of complexity and risk of client detriment and that a three-year relief period be put in place for client consent forms “to allow for a standardised industry-wide system solution for the collection and transmission of these forms to be developed”.

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As previously noted, the AFA recommended the best interests duty safe harbour be removed and that existing issues with FDS compliance be addressed.

“The current model denies access to financial advice for many Australians, as the regulatory regime and the consumer protection measures place more focus on preventing simple advice from being provided, rather than encouraging it,” the AFA’s submission read.

“The regime needs to provide consumer protection measures that are proportionate to the risk faced, that apply to those who are appropriately licensed.”

The AFA has also urged for the cost of advice to be urgently addressed, saying it “could be more than halved”.

“It is our view that there is a high level of urgency in fixing the problems in financial advice and we would therefore strongly support the development of a list of quick wins that could be quickly agreed and then either actioned or passed to the government to implement,” the submission continued.

“This could happen well before the final report is released. We would not like everything to be put on hold this year whilst the bigger framework issues are being considered.”

The AFA’s submission comes after it stated its intention to address other “regulatory issues” with the new financial services minister, Stephen Jones earlier this month.

Speaking to ifa prior to the federal election in May, AFA CEO Phil Anderson predicted that any major changes for the industry would not be addressed until the release of the QAR in December.

“We are not expecting any major announcements on financial advice policy during the course of the election campaign, as we expect that both parties are going to rely upon the Quality of Advice Review to drive the agenda for fixing the issues in financial advice and making financial advice more accessible and affordable,” Mr Anderson said.