Ignition Advice said the federal government’s response to the final findings of the Quality of Advice Review (QAR) could “reset the rules around personal financial advice”.
According to Craig Keary, Ignition Advice APAC chief executive, the government’s response will alter the look of the advice industry in 2023. This, he noted, could benefit thousands of Australians.
“This is an opportunity for a desperately needed reset of personal financial advice. We hope that the government opts to implement the review’s recommendations in their entirety, rather than being selective,” Mr Keary said.
Mr Keary added that the QAR was not about the interests of the industry and that lead reviewer Michelle Levy had a brief “to think about affordability and accessibility for the end consumer”.
“Post the royal commission, we have ended up with advice as a cottage industry, which has become unaffordable for many who would benefit from it. Tinkering at the edges will not help. Ms Levy clearly understood that and has indicated that her final report largely reflects the thinking in the proposals paper,” he said.
While there has been a lot of discontent over the QAR within the industry, Mr Keary explained that a majority of the industry has acknowledged that fresh thinking and a logical narrative was required.
“Ms Levy’s approach in starting with a ‘what’s possible’ model encouraged and fostered the industry to think about ‘how’ as opposed to ‘why not’,” he said.
“The objections we have heard are partly from those who benefit from the status quo, but also based on a misunderstanding of the scope of advice. Most contention has focused on product replacement, but this is just one small part of what Ms Levy would consider as personal advice.
“For material improvements to be achieved, realistic solutions must be considered including the role of technology to scale advice and make good advice affordable and accessible to all Australians who want and need it.”
Looking ahead, Mr Keary predicted that in 2023, many organisations will move from strategic thinking to strategic execution regarding digital advice.
“We are also seeing executives and their teams think more broadly about how technology can play a role in making advice more accessible and more affordable, while also making it available at a time when customers need it most”.
With headwinds and economic challenges “almost certainly” set to persist in 2023, Mr Keary believes the need for Australians to have safe and affordable access to guidance and advice has never been greater.
Michelle Levy had a brief “to think about affordability and accessibility for the end consumer”.
I read the Terms or reference and didn’t find that anywhere. Somewhere alone the line, Quality of Advice became Quantity of Advice. Only in a First World Democracy I guess with a health press I guess?
So we’ve had a review and a Lawyer made submissions and a CEO is now commentating. When will Advisers be consulted and when will Advisers get their concessions and carve outs. Oh wait we’re making it easier for CEO’s and Super funds to flog more products, and actual Advisers are will get some minor token, some mere dog scrapes that no doubt will be celebrated by industry associations as a win.
What Mr Keary says in the last line is correct and why QAR in it’s current form is not going to work… “the need for Australians to have safe and affordable advice has never been greater”… Product providers and Banks selling their products (sorry giving advice) to Australians will not be safe and most likely not affordable. These vertically integrated corporates, or lets call them sales institutions, whose number one obligation is to deliver higher profits to their shareholders will only restart / create an environment where by they do exactly what happened in the past, which caused the Royal Commission. I cannot understand how Levy and others in decision making positions are blind to this fact!
Conflict of Interest – No more to be said