Will delayed QAR response impact adviser numbers?

As previously reported, Financial Services Minister Stephen Jones has made it known that the government’s stance on Michelle Levy’s recommendations would not be disclosed until after the May budget.

Despite some hints as to which way the government may lean regarding a number of particular recommendations, including the more contentious suggestion that superannuation funds and banks should return to advice, advisers are likely to be kept in the dark until late this year.

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ifa spoke to advisers about the delayed QAR response and the top priorities for addressing the adviser exodus.

Amplify Wealth director Tanya Carslon said she was not surprised by the delay, and admitted that while she may be in the minority, she had expected the government to take some time to reflect.

However, she countered that a lack of news may fuel speculation throughout the industry, jokingly asking, “Where’s a government leak when you need one?”

Reflecting further on the government’s radio silence, Ms Carlson pointed out that “change fatigue” could be a consequence, and conceded that the industry may suffer further adviser exits ahead of the government’s eventual response.

“When doubt sets in, people exit. This profession can be gruelling and for some, this may be the final straw.”

Integra Financial Services founder and director, Deborah Kent, suggested that conflicting views on QAR recommendations are making it harder for the government to move forward.

Speaking also to ifa, Ms Kent said she doesn’t foresee an increase in adviser exits as a result of the delay.

“We know that advisers have left the advice profession due to education standards and I feel that was always going to be the case,” she said.

She, however, conceded that some have left because “it has become too hard and expensive” to operate a business.

Ms Kent explained that the QAR has the potential to address some of these regulatory issues, which is particularly critical for sole-adviser practices.

Specifically, she said removing fee disclosure statements (FDS), eliminating the safe harbour steps, and removing the need for comprehensive statements of advice (SOAs) is a great start for professionals to “get back to the business of advising”.

“The government needs to consider whether some of these quick wins can be done by regulation rather than legislation to quicken the process,” she said

Considering these “quick wins”, Ms Kent admitted that it is unlikely for any legislation related to the QAR to make it onto the government’s agenda this year.

However, Ms Carlson expressed hope for action on FDS and said that she is keeping her “fingers crossed” for its implementations in 2023.

“This process is confusing to advisers, clients, and product providers. It is an administration burden that ultimately costs consumers,” she said of FDS.

“Will removing this increase adviser numbers? Probably not in the short term, but it may shore up less exits — and that has to count towards a small win,” Ms Carlson concluded.