Three things are missing from the government’s formal response to the Quality of Advice Review, according to the FAAA’s Phil Anderson, while a panel has shared why they believe it should help the profession return its focus to advice delivery.
Speaking at a Holley Nethercote event, compliance experts provided their opinions on the implementation of the QAR.
The final report from Michelle Levy was issued in February and the government’s formal response was released by Minister for Financial Services, Stephen Jones, in June.
The recommendations were broken down into three streams: removing regulatory red tape that adds to the cost of advice without benefiting consumers, expand access to retirement income advice, and exploring new channels to advice.
FAAA general manager for transformation and interim general manager for policy and advocacy, Phil Anderson, shared three things he feels are missing from the recommendations.
These are the rationalisation of best interests duty, the removal of design and distribution obligations (DDO), and the removal of mandatory advice documentation.
He said: “The first one is the rationalisation of best interests duty and related obligations to make a single statutory duty as suggested by Michelle Levy.
“I am disappointed the government hasn’t jumped at the removal of DDO obligations. There are enough consumer protections to suggest those measures are not necessary for clients.
“We would see mandatory advice documentation on a spectrum, there is no way you can provide really complex advice without something material in writing. But if you have a client who asks what super fund their daughter should contribute to when they get their first job, you should be able to give an answer.
“That is not going to create huge risk, but it’s better to give an answer than to say it’s too costly for you to even open your mouth.”
Meanwhile, panellists provided their thoughts on how they hope the QAR will improve the industry.
Alex Euvrard, director at My Dealer Services, said: “Everyone is too focused on documentation and we’ve forgotten about the actual advice, we’ve all seen the most immaculate advice documents in the world but where the advice itself is OK.
“We have got to get back to a profession where we are focused on delivering the best advice to clients then how do we deliver that and what the process is. All this emphasis time spent on prescriptive documents is left of where we should be concentrating.”
Referencing the QAR, he urged the government to bring in the recommendations as soon as possible.
“We need these QAR changes to go through quickly, these ‘quick wins’ are just common sense!” Euvrard said.
“It’s about the efficient delivery of advice which will be killed off if we don’t take these changes seriously.
“Advice needs to put in front of Australians and it is too hard in the current regime.”
Zoe Higgins, special counsel at Holley Nethercote, said: “We are not going into the wild, we will be in a position where the standard of advice as a result of these changes will still be higher than pre-FOFA. We aren’t going back to the way we were, but it will be different and it will be interesting to see the result of further consultation.
“As for practical implications, it’s the undoing of compliance arrangements that we have been putting in place and fine-tuning for the last 10 years so it’s a pretty big deal.”
