With the Quality of Advice Review happening this year, ClearView managing director, Simon Swanson, said it was crucial that regulatory settings facilitated easy access to financial advice and protection for consumers, citing recent local and global events as adding further pressures on household budgets.
“The devastating impact of COVID-19 and a spate of natural disasters, including the recent floods in NSW and Queensland, have heightened awareness of the importance and value of professional advice,” Swanson said.
“However, this trend is occurring at a time when the cost of operating an advice business is significantly increasing and, in turn, pushing advice fees higher. It is important that our regulatory system is fit for purpose and does not add unnecessary complexity.”
ClearView was calling for a slimmed-down Record of Advice (RoA) to replace the Statement of Advice (SoA) in situations where simple advice was being delivered, as well as the removal of the Safe Harbour steps, in line with the recommendation of the Financial Services Royal Commission.
The group’s reform agenda citied Financial Planning Association (FPA) research that showed the cost of a SoA had risen more than 30% in the past four years.
ClearView also reiterated its support for the life insurance commission model and welcomed the Australian Prudential Regulation Authority’s (APRA) recent decision to defer five-year contract terms for income protection (IP) products for at least another two years.
“It is crucial for life insurance solutions, including IP insurance, to be stable, sustainable and simpler for consumers,” Swanson said.
“ClearView welcomes the revised approach and we support APRA’s ongoing sustainability work. We recognise the importance of engaging with Treasury on issues about product rationalisation and quality of advice, and strongly advocate for engagement with financial adviser bodies, licensees and advisers.”
