The Joint Associations Working Group (JAWG) – made up of 12 key associations including the AFA, FPA, FSC, SIAA, The Advisers Association and CAANZ – has called for a more consumer-focused regulatory approach, reduced costs and a better recognition of professional judgement for financial advisers.
In its submission, the JAWG put forward a number of recommendations, including a regulatory regime “that supports an advice process aligned to professional judgement and the situations of individual consumers guided by professional standards, as opposed to compliance with prescriptive regulation”, the removal of the safe harbour steps from the Corporations Act, access to up to date and “reliable” data within the financial services sector and the retention of professional standards and education requirements.
“Existing regulatory requirements are confusing, complex, and overwhelming and mandate a one-size-fits-all advice process that neither caters for, nor considers, the individual needs and circumstances of each consumer,” the JAWG said in a statement on Tuesday.
“This could be addressed by ensuring advice is less costly to produce and presented in a way that is meaningful and more easily understood by individual consumers, under a principles-based, consumer-focused regulatory framework that encourages professional judgement.
“The JAWG calls on the Quality of Advice Review to take up these recommendations to reduce the compliance burden and deliver affordable and accessible advice to more consumers.”
A number of industry groups have already issued their QAR submissions to Treasury in recent weeks, including some of those featured in the JAWG such as the the FPA, AFA and SIAA, as well as ClearView.
The QAR, to be conducted by Allens Partner Michelle Levy, will be provided to government by 16 December this year.
Despite calls for professional standards and education requirements to be looked at in the QAR, reviewer – Allens Partner, Michelle Levy – said in March that while some key reforms will be addressed, professional standards will be excluded.
“These reforms will be taken into consideration as part of the regulatory framework that specifically applies to financial advice,” Ms Levy said at the time.
“However, the review will not be undertaking a detailed analysis of the operation of these reforms.”
Meanwhile, 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.
The QAR will be provided to government by 16 December this year.
The way you improve benefits to consumers is to remove the Annual Fee Renewal forms, that do NOT exist in any other nation on earth. It seems the regulator does not want any advisers around to help low income, time poor families. They just want advisers working for zillionaires.
Concerning to see the FPA and AFA still cosying up the the product provider union – FSC.
Right- this is exactly what happened with Trowbridge…and we advisers got shafted
Where were these associations when we really needed them??? This could’ve been avoided if they were more proactive!
totally agree, blind freddy could see this admin issue around 12 mths ago
My goodness, there has been a lot of conversations happening for a long time. The challenge is where you are trying to talk to a brick wall. A Government that was determine to ram through changes and refused to budge. Then FASEA who refused to engage with or listen to anyone. That doesn’t mean that there weren’t/aren’t many voices shouting and chipping away.
Sounds like a good submission to the QAR. I look forward to it being ignored, whilst submissions from industry super for carve outs being granted, and compliance being based on what “consumer groups” and academics think is best for the industry they know nothing about. Am I too cynical?
How many of these groups actually represent advisers and how many are just patsies for the big product sellers?
As much as I dearly want the outcome of the QAR to be relevant, sensible, realistic ,workable and a watershed moment that sets the path of the provision of financial advice on a future which greatly benefits both the consumer and the adviser, there is a sceptical and negative shadow that tells me when you place a Lawyer in charge of the outcome nothing will be further from this.
By their very nature, Lawyers are not naturally adept at simplifying anything.
They are by nature, adept at over complicating process in order to protect the best interests of their client.
But who is Michelle Levy’s client in this instance ?
The other problem is that many Lawyers have an attitude problem.
Kenneth Hayne for example.
Many seem to think they are the echelon of all things professional.
I dearly hope I am wrong in this instance, but something tells me that Levy isn’t going to put her arse on the line in order to make advisers life simpler.
You may be right sadly so I just hope Michelle does not introduce another levy…!
Well said. (I was beginning to think that I was he only one who thought Hayne J was a bit off) His legacy is a tightening of the Gordian knot around the neck of the industry, which means it will struggle to get to professionalism any time soon.
ASIC needs to become more like the ATO in its role as regulator. ATO swims in its lanes and doesn’t pump itself up beyond it role as a regulator. And, ATO actually listens to advocacy and acts on it where appropriate.
ASIC is full of lawyers who have a vested interest in keeping things as complicated as possible.
Agree little is likely to change from the Levy review but if we only get one thing, I hope it is that any RG issued by ASIC from 1 January 2023 must be consumer focused, which means that it must be reviewed by a consumer advocate prior to release. But there I go again, worrying about the consumer and dreaming of the Corps Act providing the consumer protection it was designed to do. If a client can’t understand the advice because it is internally focused to protect the Licensee you get the outcome where it really is a “trust me” proposition. The Code requires informed consent. Done well, that would be a boon for the hapless consumer but how can they really understand the incomprehensible SOA?
Good to see many of our associations finally working together as a united voice to try and achieve better outcomes from the bureaucrats #jawg
Nah, the FPA and AFA’s close relationship with the product providers (FSC) is what caused the LIF issues. Advisers and product providers should be separate, yet the FPA and AFA give the FSC the credibility of their adviser members.
Agree, a stronger voice as a united front. When you scratch the surface there is more common ground than not.
Unfortunately anything from the FPA & FSC will be Anti Real Advisers. And the Accountants will agree as the limited license fiasco has been too much for them.
Guaranteed these mobs will be aiming for watering down all forms of REGS for Robo Sale, Intra Fund Sales & Structural SMSF Advice so they can play in a much cheaper limited REGS world.
At the same time they will push for Real Advisers to be stuck with the full BS load of current REGS.
The hope of these mobs wanting to play on a level REGS filed isn’t what they are pushing for.