The QAR proposal paper, released last month, highlights how changes intended to help the sector, actually hindered it, according to an industry group.
Ignition Advice said increasing costs and declining financial adviser numbers since the Hayne Royal Commission has seen advice become more complex and less accessible.
In its analysis of the paper, the advice technology specialist said: “If there’s a theme running through the Quality of Advice Review proposals, it’s that perfection has become the enemy of the good when it comes to financial advice in Australia.”
The group has backed key proposals put forward by Michelle Levy, including the provision of “good advice”, the relaxation of documentation requirements such as statements of advice and the delivery of digital advice.
Ignition Advice Asia Pacific CEO, Craig Keary, has argued that while Australia has a “large advice problem”, it is very resolvable and a good advice standard is one example.
“Ms Levy offers a new model — good advice. She is explicit that this is not necessarily the ‘best’ advice in any situation, but advice which is reasonably likely to benefit the client based on their circumstances at the time the advice is given,” Keary explained.
“While no set of proposals is perfect, the good advice model offers a realistic path to high-quality financial advice being available to all Australians who would benefit from it, in ways that are accessible and affordable.
“In particular, the proposals paper offers an approach to broaden how advice is provided via more institutional involvement, and a wider spread of people within institutions delivering simpler advice.
“Consumers expect advice from their institution, institutions should be providing it, and ultimately, digital advice will make this achievable in a fully compliant, affordable, and accessible way.”
Ignition are yet another industry group that has responded positively to the proposal paper, which follows praise from the Joint Associations Working Group (JAWG), the SMSF Association and the Financial Services Council (FSC).
“The paper sets out proposals to make it easier for consumers to have meaningful, fit-for-purpose conversations with their advice provider about all or part of their financial and lifestyle objectives while maintaining robust consumer protections — an objective the JAWG supports,” a statement from JAWG read.
“As a coalition of associations, the JAWG understands and values the broader community good and significant social benefits that come from financial advice done well, and we look forward to continuing our engagement with Treasury, Government and other stakeholders to advance this agenda.”
Ms Levy recently discussed progress on the QAR on the ifa Show podcast. Listen to the full episode here.
What a surprise we have a Robo provider supporting a model that allows his product….
It’s a simple concept…get clients to sign annually.. yet introduce ASIC and Treasury that want to destroy Financial Advisers and you end up with concepts like Anniversary dates, renewal periods, multiple documents, and the inability to renew a relationship on a Monday because the anniversary date is Tuesday. It’s not incompetence or legal people writing laws, it’s corruption. It’s corrupt public servants within Treasury & ASIC wanting to get rid of Financial Planners. It’s Treasury and ASIC officials on the payroll of large institutions and Super Funds. You can’t put this stupidity down to incompetence, consumer protection or legal reason. The only explanation is corruption.
I often wonder what dream world some people live in…I’d like to live there too!
How does “good advice” fit in with best interests duties and, more broadly, the FASEA (now presumably ASIC) code of ethics & the professional associations’ codes. Does it mean that these will need to be either re-written (heaven help us!) or (hopefully) slightly amended.
As always, it will become the usual lawyers & compliance picnic.
Providing good advice used to be so simple, now it’s a mine field.
Regulators and other don’t seem to appreciate what it’s like at the coal face…the poor client has so many documents thrust upon them for reading & signing that their heads spin. They are really no better off, plus their minds are cluttered with meaningless (to them) compliance rubbish that they have no more space left to absorb the good advice provided. All in the name of consumer protection. Like I said, heaven help us!
Prior to the election, wasn’t Jonesy talking up the mess the previous government left us in & how he was going to fix it up quick smart if he got into office. Where is he? Oh yeah, that’s right, burying us in reviews & consultation papers…well done Jonesy! You’ll be able to duck out on your promises for many months whilst you persist with these. For those of you who voted for Labor in the hope they would change things, you’ve been sucker punched. Both mobs are the same, talk it up & don’t deliver.
Now I see the Liberals taking some pot-shots at Labor from the cheap seats, on the mess the Liberals created in the first place. Frustrating & ridiculous.
Can someone please pass me a glass of red wine to help wash the pain away?!
Can’t wait to see how the lawyers go when the client disagrees with what the planner thinks is ‘good advice’. To get rid of the documentation will be the end of advice as we know it. No insurance company will offer PI cover at all.
If I understand it – the “good advice” won’t really apply to a qualified Financial Planner who still have the Code of Ethics etc – “Good Advice” is for the product manufactures sales teams delivering advice to members all paid for from the Admin Fee – correct me if I am worng?
File note and holding your research on file should be sufficient. You may actually have a more engaged client who actually understands the advice rather than throwing a 100 page soa at them.
Has it not helped 1) reduce the number of Financial Planners, 2) reduced the number of clients a Financial Planner can service, 3) reduce competition of Industry Super and 4) Increased FUM of Industry Super?