Speaking on a live ifa webcast, the head of the Quality of Advice Review (QAR), Michelle Levy, urged the industry to get behind her 267-page final report, noting that “the quick wins are not going to get us very far”.
Asked to share her thoughts on the latest open letter the Joint Associations Working Group (JAWG) penned to Financial Services Minister Stephen Jones regarding the QAR, Ms Levy said: “Let’s not compromise.”
“We can tinker with the law as it’s being drafted. We can tinker with things at the end. Let’s get the whole thing out though happening. Let’s do the experiment,” she said.
Ms Levy explained that she fears focusing on “quick wins” would come at the expense of “everything else”.
“This is good. Let’s try it. Knowing there’s a whole lot of consumer protection there,” the QAR review lead and partner at Allens said.
The JAWG’s open letter indicated that the associations did not want to see the QAR forgotten and asked for a number of quick wins including the removal of statements of advice in their current form and the introduction of a “standard fee consent form”.
The recommendations placed in the further consideration category included the revised definition of personal advice and the introduction of the good advice duty, alongside a number of other recommendations deemed more controversial.
Ms Levy also expressed her disappointment regarding the federal government’s delayed response to her recommendations during ifa’s webcast.
“I think the recommendations have had a lot of support, and they’ve had a lot of support from people who don’t necessarily always agree on things, which I think is very telling” she said.
“The recommendations are really good for consumers, and they will help the whole sector help their customers, their clients, their members.”
Asked about the key message she wanted to convey to advisers, Ms Levy said there are two ideas she would encourage them to keep in mind.
“One, this is about your clients and it’s about people who need advice, so think about the big picture,” she said.
“Secondly, it’s actually good for advisers. This will help you do your jobs much more easily in a way that your clients want you to do. It will allow you to think about, ‘How can I best help my client? What do they need?’, and do your job as a professional.”
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Analogous with Good Advice, quick wins are better than waiting to kill the profession through all changes and giving product providers a free pass with non relevant providers that don’t need to follow a code of ethics, be experienced or educated.
They’d be better than nothing.
The Minister clearly doesn’t care about reducing costs for consumers.
His complete disinterest in that, and his comparable keenness to help out his union mates tells me FASEA chose the wrong group of people to enforce ethics exams on.
He is a compromised individual.
It is and only ever was supposed to be about clients. We (advisers) have always known this fact. Nothing has changed other than a fresh bunch of muppets making decisions for which we all pay the price. As always.
Advisers if you want a quick win then just increase your fees because that is an action you can both control and explain to your clients. It makes commercial sense in helping to remain profitable and to deal with the current red tape nightmare which has been layered upon you by politicians. There has been a lot of talk from people like Levy and Jones but no actions to date to help you thus the request from JAWG…
Until they remove annual opt-in the industry will continue to slide to a model that has 100 clients per 1 adviser. Out with the the lowest value clients as larger clients come into your firm. Very simple to see this as it is happening right now!!!!
“This is good. Let’s try it. Knowing there’s a whole lot of consumer protection there,” the QAR review lead and partner at Allens said.
I wish she could explain what consumer protections there are for a consumer besides the good advice line she uses.
As an example, a super fund called ABCSuper has 4 investment options. The most aggressive has 15% bonds. History shows this has had returns 1% lower than pre-mixed investment options with other funds that have 100% shares/property.
If a 35 year old approaches the ABCSuper, they will more than likely direct them to the aggressive investment option of their own fund. Is the consumer told about the likelihood of lower returns? Is the consumer advised to go elsewhere?
Is the advice from ABCSuper still good advice, even though it may result in a significantly lower balance at retirement? Which government agency will monitor this?
Ms Levy, you were asked to put a report of recommendations together – thats it. Whats done with it after that is out of your hands. Not all of your suggestions were good ones either and would likely cause more harm than good. For an already tightly legislated industry, advisers have had to adher to numerous changes over the years, and then revert back when it came to light they didn’t work, and had been suggested by people who really had no idea how things worked in financial planning. You did your job, you were paid for it, it was never guaranteed your recommendations would be rolled out in full or in part, or when that might occur. Move on.
What needs to be concentrated on is the tight reins licensees hold over their advisers – how advisers can act in best interest when licensees hold the purse strings on products and providers you can and can’t use is beyond me. An adviser was just reprimanded for not acting in the best interest of the client, because he followed his licensees requirements – the licensee wasn’t taken to task over it, the adviser has bourne the brunt. Lets look at where the issues really are here.
Hear, hear! 80% of Levy’s recommendations were good. 20% were bad. Levy seems to be trying very hard to defend the 20% that were bad. Jones needs to hurry up and implement the 80% that were good. Then he needs to fix the even bigger issues such as vertical integration and individual licensing that weren’t even touched.