Consultation opens on Quality of Advice terms of reference

The Government has opened consultation on next year’s Quality of Advice Review which is receiving submissions until 4 February, 2022.

Treasury said the review would consider whether the measures that had been implemented by Government, regulators and financial services entities since the Hayne Royal Commission, had improved the quality of financial advice and whether further reforms were needed.

Consistent with recommendations 2.3, 2.5 and 2.6 of the royal commission, the draft review stated it would consider how the regulatory framework could better enable the provision of high quality, accessible and affordable financial advice for retail investors.

The review would examine:

• Concepts such as general and personal advice;
• Safe harbour provisions for the best interest duty;
• Disclosure requirements including statements of advice;
• Recent reforms to annual renewal for ongoing fee arrangements;
• Life insurance remuneration reforms;
• The remaining exemptions to the ban on conflicted remuneration in life and general insurance;
• The processes through which investors were designated as sophisticated investors and wholesale clients;
• The application of the advice framework to certain activities and professions such as accountants;
• Actions undertaken by the Australian Securities and Investments Commission (ASIC), including regulatory guidance and class orders; and
• The role of financial services entities including professional associations.

Treasury said the review would be led by an independent reviewer who would provide a report to Government by 16 December, 2022.