An industry head believes “very significant” change will come from the upcoming QAR, but expects that it will take some time before the changes take effect.
On the latest episode of the ifa Show podcast, the Association of Financial Advisers (AFA) CEO Phil Anderson discussed his expectations about the QAR once it’s released on 16 December.
“I think we are expecting that it will most likely lead to [a] very significant change. We expect that. We won’t know for sure until we get to the end of the process,” Mr Anderson said.
“But material change, particularly where it will involve changes to the Corporations Act, will take time to implement.
“So, we would anticipate that we will get significant recommendations, but it might be 12 months before we actually get to see legislative outcomes, and then it might be a transition period beyond that.”
Mr Anderson said the industry would most likely be forced to wait for government to respond to the review recommendations, then for Treasury to draft legislation, followed by a consultation process before anything can go through parliament.
While he doesn’t expect it to be a quick process, Mr Anderson said the financial advice sector has reason to be optimistic that the QAR will “get to the core of some of the problems that we have”.
“We would expect to see some very material recommendations that we would very much hope will make a significant difference to dealing with the issues of access and affordability of advice,” he said.
“But also the efficiency of the advice process and the removal of unnecessary red tape and bureaucracy; just a significant impact on the efficiency of delivering financial advice.”
In its own QAR submission, the AFA called for regulatory obligations for the provision of financial advice to be “proportionate” to the level of complexity and risk of client detriment and that a three-year relief period be put in place for client consent forms “to allow for a standardised industry-wide system solution for the collection and transmission of these forms to be developed”.
As previously noted, the AFA recommended the best interests, duty-safe harbour be removed and that existing issues with FDS compliance be addressed.
On the same episode, Mr Anderson also called for QAR reviewer Michelle Levy and Treasury to address the “significant layers of bureaucracy” forced on the advice sector in recent years and also said he expects that the Albanese government will make good on its promise to address education standards in the financial advice sector.
Listen to the full episode with Mr Anderson here.
Sadly, the Joint submission is going to be the be the main focus for what will be done. While there are some good things in there, it misses the elephant in the room, the thing which was the catalyst for many of the regulations we now have – the conflict of interest caused by advisers working for companies that “”encourage”” them to recommend products that they make money from. Without this conflict of interest, there isn’t the great need to show clients why we recommend switching from one product to another.
This needs to be addressed but won’t as way too many vested interests with loud voices.
100%
If any changes that are meaningful actually get recommended, the change process will be fraught. Look at the constitution of the current parliament. The Greens hold significant power in the Senate and the LNP needs to be convinced this is the right approach but are likely to play politics.
So what to do? ASIC could be directed to back off and change their regulatory approach. That would be a meaningful change that could happen quickly.
what a load of BS. Thousands of advisers have already left – time for class action compensation….
Seriously, how much more change does this busted industry still need?
We’ve already seen at least 40% of the adviser leave in the last 2 years (with more to follow on Sept 30 I strongly suspect). Is an industry without ANY advisers what these corrupted, self-serving politicians and regulators want to see?
These people are making changes just for the sake of making changes – not because it provides any REAL benefit to consumers or the industry itself. Its all about conflicted interests and they’re banned aren’t they? They are for advisers!!
The only significant change will be further carve outs for product providers, particularly union funds. If any adviser expects that a licensed adviser will get any relief they have fooling themselves. Don’t put any weight on Stephen Jones pre election comments, they are just words, from a politician who must report to his union fund masters..
Here’s a thought for Stephen Jones…
Just as was done by both Labor and Lib’s on the ‘eve’ of the Royal Commission report, both parties announced that they would implement every recommendation contained in the report…
Let’s have a similar statement from Stephen confirming that every recommendation that makes advice commercially more affordable for clients to receive financial advice provided by (professional) financial advisers who will henceforth be respected and treated as professionals with a corresponding reduction in the powers of AFCA and ASIC as the profession moves towards self-regulation. This should also lower the mental anguish and torture foisted on our profession in recent times!
The mental health of so many advisers is in such a dire state that I’m not convinced the long and drawn out delivery and implementation of meaningful and necessary regulatory change is going to be acceptable.
Stephen Jones’ initial (pre-election) sentiment was that this needs fixing and fixing now.
However, as the reality of the process of change sets in, the urgency to have these implemented in a time frame that will deliver real relief and benefit to not only the advisers but of course the consumer and public seeking advice will be the real test.
There is only so much that advisers can withstand and they have withstood an onslaught of regulatory impost and layers of anti- adviser focus and attack for the last decade.
It is time this ceases immediately and Stephen Jones shows just how serious he was prior to the election or whether it was simply pre-election spin designed to grab votes from a broken and desperate advice community who had simply had enough of the discriminatory barrage of abuse the Liberal’s oversaw during their term in Govt.
Good final point, let’s never forget it’s been 9 years (multiple terms) of Adviser Killing by the LNP, with Frydenberg leading the charge and his puppets like O’Dwyer & Hume dutifully implementing Frydenberg’s Adviser massacre.
Whilst I’m not real hopeful of Labor doing much better. I was very happy to vote against LNP for the first time, it really can’t get any worse under Labor.
Still utterly disgusted in the 9 years of Adviser killing & mass BS Red Tape compliance overload from LNP & Frydenberg and wonder if I will ever vote for them again ?
don’t forget Shortens / Gillards “FOFA”.
FOFA wasn’t a real big issue compared LNP & Frydenberg
Does this mean that any changes will be retrospective? Given that ASIC currently and continues to hold advisers accountable by applying Hayne reforms, and being faced with current civil and criminal charges to advice that was provided back in 2008? Or is it ASIC’s discretionary powers still in play???
I know the AFA cops a bit of a bagging, however Phil actually seems to be one of the few who people in our industry that’s not on the tools themselves, but who actually gets what the real issues are.
Does anybody really think Labor is going to unwind any of this stuff ? I’m not even hopeful.