Michelle Levy has hit back at criticism of her appointment as reviewer of the Quality of Advice Review (QAR) during an appearance on the ifa Show podcast this week.
Following the announcement in March, many backed the move to appoint the Allens partner, while others advocated that someone actively working in financial advice should be taking on the task.
However, Ms Levy said being a lawyer and working in the regulation of financial services makes her a suitable choice to assess how the regulatory framework could deliver better outcomes for consumers.
“I’ve lived and breathed this stuff, I suppose, since it’s inception,” Ms Levy said.
“The review is a review of the regulatory framework… and I think I have a really good understanding of the industry and what I hadn’t known before, I’ve learned because I’ve had so many conversations with dozens and dozens of people. So it’s been terrific.”
Ms Levy said that the QAR will look at how the law applies, so a deep knowledge of the regime is “fundamental”. As well as this, she suggested that there is “a lot of misunderstanding” about how the law and regulatory framework work together.
“I don’t think that the industry is foreign to me. And then finally the industry itself is extremely diverse,” she said.
“So to have pulled, for example, a very experienced financial adviser will have left people in superannuation funds in banks and insurers saying: ‘Well, why them? What about us?
“So I think that’s another really important thing to remember in thinking about this review. It’s not just about financial advisers giving advice. It’s about the whole ecosystem.”
On the same episode of the podcast, Ms Levy agreed that the local financial advice industry has been subject to a perceived “overregulation” in recent years and argued that “tinkering” with some of the reforms won’t make much of a difference and instead said that “quite significant changes” will need to be made to how financial advice and the provision of advice are regulated.
The QAR garnered a large number of submissions, with the likes of the Association of Financial Advisers (AFA) dubbing it the industry’s “biggest hope”.
Most recently, key groups including the AFA, FPA, FSC, SIAA, The Adviser Association and CAANZ united in a joint submission to call for a more consumer-focused regulatory approach and reduced costs.
The QAR is set for release on 16 December.
Listen to the full podcast with Ms Levy here.
I am deeply concerned by Levy’s comments that clients “should be able to get advice from all over the place”, and I sincerely hope that this was taken out of context.
One more regulatory hammer punch to the licensed planners should do it. Then I will finally be free to act unencumbered by competition to “advise” on even even more Crypto “investing”……mwarhaha
Dear Ms Levy, if you make statements such as ‘the local financial advice industry has been subject to a perceived overregulation in recent years’, then it is glaringly obvious that you are not up to the task. The overregulation is very real Ms Levy.
Levy by name,
Levy by definition:
1a: to impose or collect by legal authority
1b: the imposition or collection of an assessment
So I guess this means we will face another ‘Levy’.
I wonder how many experienced advisers Michelle Levy has spoken with? If she actually HAS then will she act on the
advice given to her by advisers? Knowing and being experienced with ‘regulation’ is less than half way there Michelle – you need to heed what those at the coal face with the end user say to you! Until then . . . nothing will happen better than it is now.
And……..
How many QAR submissions have been received? 20? 50? 250? 1,000?
How many of the QAR submissions has she read?
Has she read them all?
And who else is assisting her?
Just more questions and no answers.
Best odds on zero…
Michelle Levy to recommend anyone and everyone be able to deliver advice? Really – who is she trying to convince she is on top of her brief?
So someone, please explain why a Financial Planner must do: –
– Degree/Ethics and more Ethics
– FASEA
– Professional Year
– Ongoing Education and more Ethics
– FGS and disclosure of non independence
– Be Licenced
– Pay Licencee
– Pay ASIC
– Pay FPA – serious wastes of money IMO
– TOE
– Fact Finder
– Risk Profile
– Research
– BID
– Alternative product Comparison
– Alternative Strategy
– SOA
– Informed Consent and all the record keeping etc
– Authority to proceed
– Beg Product Provider for permission for fee (within limits of course) IMO
– FDS
– Opt-in
– Had Commissions BANNED due to conflicts which they say leads to back outcomes for clients
And now Michelle Levy wants to allow everyone to provide advice? Seriously?
So, if I am employed by an Superannuation Fund, paid by the Superannuation Fund with fees from the Super Members (even those not receiving Advice) conflicts no longer matter.
So why would anyone ever want to become a Professional Financial Planner? What is the point?
Back to the 1980’s we go but not AMP et al – now Industry Super is the big player in town. It is clear now perhaps.
You forgot to add the enormous business risk of negligent document / advice breaches and being faced with ASIC enforced lawsuits and Federal Court imposed civil and criminal penalties, assets frozen, reputation and career destroyed in the public eye, lengthy jail time…
Oh I think she is on top of her brief (or rather her and Jane Hume’s brief) – “We want all of Australians to be able to access affordable advice, and if that means different rules for different ‘advisers’ then that’s what we will do. We want Australians to be able to access both regulated and unregulated advice through FinFluencers, Industry and Govt. Funds, Crypto brokers, Online Advisers, Book Merchants, TV and radio, basically anywhere they can access what they need at a price they want to pay, even if it is subsidised by their employer – this will be truly Industry changing”.
You forgot to add TMD and DDO. And failure to research and file the TMD would result in a reportable breach, which also should be added to the list, and then you would face ASIC and potential civil and criminal penalties, and banning for life.
Just listened to the podcast. There are a number of things not mentioned in this article:
1. Levy understands consumers don’t want 80 page SOAs, and acknowledges the inception of SOA’s which dates back to FSR, is now very much out of date considering regulations since then. She is looking at significant changes here, which is interesting and encouraging.
2. Levy wants to roll back the ‘process’ of advice delivery and focus on whether the end advice is sound, leaving the provider to document what they feel is necessary to support the quality of advice. This is also very interesting and encouraging.
3. There is a paper coming out next week with proposals for feedback. We will get a very good idea of what is coming therefore next week. Steven Jones already has a copy of the proposals and she is keeping him in the loop, with a hope for quick implementation after the final report in December.
4. It is very clear that super funds, bank employees and online operators will be given a free pass to give financial advice, even though they are not qualified. This includes ‘personal’ financial advice, not just general advice.
Should add the interviewer did a very good job, and this was a great podcast by IFA. Thank you for the insights.
There are 2 points I want make.
1. As Michelle Levy has ” lived and breathed this stuff ” I ask if she promises to access a full copy of the
Australian Financial Advisers Wellbeing Report 2021 by Dr Adam Fraser and Dr John Molineux.
This comprehensive report’s findings are staggering in regard to the impact on adviser’s mental health as a result of a decade long regulatory attack.
2. Ms Levy states that she wants to assess how the regulatory framework could deliver better outcomes for the consumer. However, if the regulatory framework needs to deliver significantly better outcomes for advisers first whuch will in turn deliver significantly better outcomes for their clients and consumers.
The massive ball of red tape strangling this profession to the point of asphyxiation must be cut and unravelled if we have any hope of rectifying the mess that currently exists.
I can guarantee that Michelle Levy, ASIC, AFCA, the Govt. and Treasury either are not aware of the above Wellbeing Report 2021, along with the Hunt and Prendeville Mental health Survey 2022 – or – they have read it and buried it. If they have read it, then how come they have not acknowledged it and it’s findings publicly?
From the moment levy said she was ‘taken aback’ by our concerns, and downplayed our fears, it was obvious she was the wrong person for the job. It didn’t need to be a financial planner running the review (as much as it would have been nice). We just needed someone who would listen and not be clouded by vested interests
Her commentary leaves me feeling Michelle would be equally well credentialed to open the batting for Australia just because she has played cricket…
What could go wrong?
If Michelle ‘taken aback’ Levy leaves us tied up in red-tape and gives a free pass to her product flogger customers, which is starting to appear more and more likely, financial advisers will not accept the review and will rightly contact the media. She is walking a very thin tightrope. The Age, AFR and 4 Corners for example, will be all over this if it goes the way it is looking and her legacy will be trashed.
Imagine conducting a review into medical advice, and putting a lawyer in charge who works for drug companies. There would be outrage from the medical profession. Imagine if the recommendations allowed drug companies to flog their own products directly to consumers, without the same protections afforded to consumers who go to the doctor. It would be scandalous. The media are finally starting to wake up and realise there is a serious problem with financial advice regulation, and they have been supportive of a sensible rollback. They will listen to us if this review goes sour. This could get very interesting.
I hope she sees sense, but time is running out and I am growing less and less optimistic every time she opens her mouth.
unfortunately the medical industry and legal industry is so full of conflicts, product flogs and mis-direction, the legal industry think they run the country, they run every job and control the lives of Australians, we have no hope…..to put a Lawyer in charge of helping our profession is ridiculous, has she sat and spoken to 30+ years experienced advisers ever??
Levy has “lived and breathed” helping large financial service companies navigate the law to sell more products. That’s her expertise. She neither understands nor cares about genuine professional advice. The so called “QAR” will be all about consumer protection carve outs for product companies.
[i][b]Quality[/b][/i] of Advice Review is just as much a misnomer as [i][b]Single[/b][/i] Disciplinary Body – another Jane Hume bald faced lie. Don’t forget QAR was set up by Hume, and Levy was hand picked by her to run it.
Ok Michelle, if that’s what you honestly believe so be it. Let your actions do the talking and fix this mess.
Her statements in the Podcast indicates self evidently that she is NOT well placed to head up the QAR.
She should sit the FASEA exam under exam conditions to genuinely get a ‘deep knowledge of the regime.’ Through her exam preparation, she can see firsthand the trainwreck of a legal framework we’ve been lumped with.
Oh yes, and if she doesn’t pass first time, she resigns from the review.
Could someone arrange for all these comments to be forwarded to Ms Levy and hopefully she will read them.
Michelle ‘advice all over the place’ Levy. Yep definitely knows what’s best for the advice industry.
Her statement previously was she was “She was Quite Surprised in our industry”…..
She lived and breathed what? Obvoiusly not the same dilemas we are facing.
I have absolutely no doubt that the result will be a far worse outcome for licensed financial advisers – than already exists.
With carve outs – so that Industry Super can provide advice without all the hassles of BID, PI cover, etc etc.
No action on vertically integrated businesses – so that they can continue to flog product via their aligned Advisers – with or without disclosure.
The Govt. will declare that the measures, “are good for the Industry and an even better outcome from consumers, who are now able to access more affordable advice from a broader range of sources”
100% correct, and the Govt. signoff on the QAR will be endorsed like it always has in the past simply due to the fact (just check the Govt. financial register) that the majority of MP’s have investment properties (according to the Govt. financial register) and do not use a financial adviser, along with the fact that financial advisers are effectively competing with Treasury by minimising tax revenue.
How dare advisers think they would know more than a lawyer about all the red tape that financial advisers are faced with.
It’s not as if the over regulation was actually created by lawyers…oh wait.
The really sad and disturbing thing about the QAR is that this forum and 1 or 2 others are the only channels for any adviser’s voice to be heard publicly. Given what advisers have had to deal with over the last 10 plus years, it’s an appalling reflection of the QAR process.
We were able to make submissions (and I made one myself). However I am as worried as others, particularly with the opinion that “we need all sorts of people providing advice. This is counterbalanced by previous comments made regarding not wanting carve-outs, so I’m not sure where she is heading towards. All I can say for certain is that the one group of people who should be able to provide advice based on a principles based approach are qualified advisers on the FAR who have completed the required exam and education. Broadening the horizon to “all sorts of people” would be like going back 20 years.
What disappoints me is that I can be one of the ‘all sorts of people who can give advice” of do the degree, the membership, code of ethics, etc. to become a professional and all it gets me is over regulation, mental anguish and a ton of additional expenses together with the threat that my career could be over in the blink of an asic eye. As one of those already fully qualified to continue beyond 2026 with 36 years experience at that time, I have to ask myself why did I bother?
100% Has Shoes, this is exactly the view from all of the highly qualified and experienced advisers’ office right around Australia right now.
There didn’t seem to be much of an understanding about AFCA and why Advisers are ‘scared’
…clearly I’m in the minority here, but Ms Levy seems perfectly reasonable to me.
Seeming reasonable is probably the best outcome we’ve achieved in the last 10 years.
Pretty confident carves out provided to certain sectors will mean most Advisers will become extinct within the next five years. Been in the industry for 20 years, have changed my business model many times to cope with regulatory changes, and was considered to well ahead of the curve. I’m educated, happy clients. But I’ve read enough to appreciate no matter how much I enjoy helping clients that my days are numbered.
Prescient!
Agree – even though we have withstood everything thrown at us – the “vibe” has changed. A Labor Govt were always going to look after their Union and Party affiliates who run the IFA network.
Time to start on the exit plan.
I’ve had so many conversations with dozens and dozens of people
Hopefully at least one adviser in these dozens but unfortunately that’s unlikely
“I’ve lived and breathed this stuff, I suppose, since it’s inception,” Ms Levy said.
Everything about that statement worries me. I’d prefer if she said I have a really good understanding of the regulations but not being a financial adviser I’m completely aware that I’ll have to defer to others to understand the practicalities of these regulations. Lawyers such as myself have never once gotten this right but we all claim to live and breathe this stuff before we then deliver outcomes that aren’t that useful in practice and then wipe our hands and pass the baton to the next lawyer to get it wrong.
There seems to be a pretty consistent view that the current licensed advisers will get very little relief from Ms Levy. Happy to be wrong, but it seems from every word that has come out her mouth, and Mr Jones, is they want to give a free kick to their mates, product providers, rather than fix the mess the last lot of lawyers and bureaucrats created. It’s concerning that she can’t understand why being a lawyer makes her a poor choice to head this review, and god help us if she has only spoken to dozens of people, which most likely includes very few if any actual advisers.
Regardless of her background, experience and recent “whole ecosystem” discussions, how is the Industry faring after the last 1 person lawyer review (Hayne), and the 1 before that (Ripoll)? Given the sheer size of the task and responsibility, appointing 1 person to the QAR is a lesson not learned.
Industry Super has massively increased FUM and market share, competition from retail Super has been almost eliminated and the Banks have exited. Financial Planner – basically the only ones who would move someone from Industry Super to something else are decreasing in absolute number and their ability to service clients has been dramatically reduced down to perhaps only hundreds per adviser at best.
“I don’t think the industry is foreign to me.” Have you worked as an adviser? It’s like someone eating a steak and saying they know what it’s like to be a cattle farmer!
Who has she had “so many conversations with dozens and dozens of people. So it’s been terrific.”
Hopefully not the large Dealer Groups and AMP / Insignia.
or worse still, Choice, ASIC and industry super
Hopefully not any dealergroup!!!