The Financial Services Council (FSC) has outlined five proposals related to financial advice for the next Parliament ahead of the Federal election.
In a report, the five topics for advice were:
- Simplify financial advice regulation;
- Facilitate a consumer driven advice process;
- Ensure appropriate protections for consumers of financial advice and services;
- Promote principles-based regulation and guidance; and
- Further a sustainable advice profession.
Going into more depth, the organisation said this included abolishing the safe harbour steps for complying with best interests’ duty, simplifying documentation for personal financial advice and increasing and indexing the asset test for wholesale clients.
Regarding the safe harbour steps, the FSC said this approach was “a key driver of cost and prohibitive to enabling limited advice to be provided to consumers”.
Meanwhile, on documentation, the Statement of Advice should be replaced by a Letter of Advice as this would mean less paperwork and less time while ensuring advice was better understood.
Finally, the wholesale asset test should be increased to $5 million and indexed in order to keep change with rising wealth among consumers.
It also sought to reduce the burden of the Design & Distributions Obligations (DDO) on advisers by ensuring the personal advice exemption was correctly applied to dealings in a financial product.
Acting FSC chief executive, Blake Briggs, said: “All sides of politics have an opportunity to use the upcoming election to think about how the financial services sector can support economic growth. Financial services is worth $161 billion annually to the national economy and meets the needs of millions of consumers.
“Recent years have been challenging for Australians and the national economy. To put these challenges in the past, governments should continue to focus on policies that promote growth, boost confidence and encourage business investment.”
