Responding to likely delays in the government’s response to the Quality of Advice Review (QAR), as suggested by Financial Services Minister Stephen Jones last week, Ms Abood urged the minister to “maintain the momentum”.
She highlighted a number of areas where the government could achieve some “quick wins”.
“A number of its recommendations appear to have widespread support — they are the removal of statements of advice, the simplification of fee disclosure and consent and including allowing the financial services guide to be posted on a website, and the unwinding of unnecessary obligations on advisers in relation to the Design and Distribution Obligations,” Ms Abood said.
“Rationalising of the Best Interests Duty and Related Obligations and removal of the safe harbour steps provide another opportunity,” she says, adding that the safe harbour steps add substantially to the cost of advice.
“These changes respect the universal uplifting in professional obligations across the profession and allow us to use professional judgement. Most importantly, these recommendations aren’t co-dependent on other changes occurring within the review.”
However, Ms Abood expressed concern over the proposal to allow non-relevant providers to offer simple product-based advice, which, she said, had caused the most concern among FPA members.
Under this proposal, Ms Levy recommended that in order to bridge the advice gap, banks and superannuation funds should be allowed to provide simple financial advice to their customers.
“It’s particularly concerning because advisers around the country have invested much time and money in achieving a suite of professional standards aimed at protecting consumers, and ensuring the quality of advice in Australia is consistently high,” she said.
“We are concerned that allowing vertically integrated advice to be provided by those without any qualifications or experience risks consumer harm. We are keen to further engage with the government on ways this proposal can be improved on with the introduction of some sensible minimum requirements.”
The FPA CEO urged the minister to “push ahead as quickly as possible” with remaining consultation on these recommendations, which, she said, “are critical to support consumers in obtaining high-quality financial advice”.
Last week, Mr Jones confirmed that the government’s stance on Michelle Levy’s recommendations would not be disclosed until after the May budget.
The minister also indicated that he is actively contemplating the possibility of permitting non-relevant providers to offer advice, but with the exception of superannuation funds and insurers — an implication the QAR lead Michelle Levy told ifa she was disappointed by.
Dear Sarah,,,, Why come circa 2024/25 would I want to be an FPA member, sitting next to an “Adviser” that works at Hesta or Telstra Super, that has no education, never sat an exam, no requirement to act in anyone’s best interest, no skin in the game, no personal commitment but under the pump to “sell” Hesta Super funds by his/her manager newly recruited from AMP to drive revenue for Hesta….and when things go wrong we’ll all blame Hesta and not that person…..and the only reason that person is a member of the FPA is because Hesta signed them all up for free in bulk…… Why would I want to be a member of that association Sarah ?
I wouldn’t and come when it’s time to renew my membership I’ll be giving up after 20 years.
I’ll make a prediction. The only part of QAR that actually gets implemented will be the part that allows non-relevant providers the ability to provide advice to their own customers about their own products without having to be bothered by that pesky best interest duty. This will only be allowed by Super funds, mainly union based super funds who complained constantly about the banks utilising vertical integration.
All the parts that actually help the adviser who will still and always have best interest duty to consider (and rightfully so) will be lost.
A good minister will be able to navigate and manage bureaucracy to get things done. The small stuff is quite easy and there should be plenty of collaboration or support for this (ASIC, consumer), no barriers given what IFAs have been through we should be allowed to shine. If these things do not happen, then this industry remains manifestly viewed as dysfunctional by govt and regulators alike and the FPA will need to step up (again). We will no doubt see who the enemies are, but we have a right to easing administration for our consumers best interests. So get on with it Minister Jones or speak your position ..