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Concerns raised with QAR proposal to remove ‘general advice’

An industry group has responded to the proposal paper.

The Stockbrokers and Investment Advisers Association (SIAA) has flagged concerns with a key recommendation in the Quality of Advice Review (QAR) proposal paper.

Released last month, the industry group said that while it welcomes the paper for “thinking outside the square”, it is wary of “possible unintended consequences” of the proposal to remove “general advice”.

In the paper, QAR reviewer Michelle Levy proposed that the “definition of ‘personal advice’ should be somewhat broader so it is clear that it applies whenever a recommendation or opinion is provided to a client about a financial product (or class of financial product) and, at the time the advice is provided, the provider has or holds information about the client's objectives, needs or any aspect of their financial situation”.

In a response this week, SIAA CEO Judith Fox said the QAR must ensure consumers are not disadvantaged.

“Let’s consider online brokers whose clients have chosen a low-cost model of investing that does not include personal advice. What happens with the research reports on listed securities including an opinion or recommendation to ‘buy’, ‘sell’ or ‘hold’ a security that currently comprise general advice?” Ms Fox said.

“Those reports are valued, but they go to all clients. Under the proposals, they are captured by the new definition of personal advice. We would not want to see online brokers forced to halt sending these to their clients due to the concern that this will be considered to be personal advice. Clients lose out if that happens.”


SIAA has called for a ‘bright line’ between the circumstances in which a full-service stockbroker provides advice that is subject to the best interests duty and one in which a call-centre operator provides ‘good advice’.

“The ‘bright line’ will need to take into account the limitations inherent in advice provided by a call-centre operator who is not subject to the Code of Ethics, best interests duty, and education and professional standards that apply to full-service stockbrokers,” Ms Fox said.

“It will be important that the review provides additional examples that ‘flesh out’ how licensees and advisers will develop and assess advice that satisfies the new best interests duty alongside the new ‘good advice’ duty.”

A number of industry associations have responded positively to the proposal paper in recent weeks including the Joint Associations Working Group, the SMSF Association, and the Financial Services Council.

Ms Levy recently discussed progress on the QAR on the ifa Show podcast. Listen to the full episode here.

Neil Griffiths

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.