FAAA and FSC welcome first consultation to remove advice red tape

FSC Sarah Abood Blake Briggs

15 November 2023
| By Laura Dew |
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The Financial Advice Association Australia (FAAA) and the Financial Services Council (FSC) have responded to the first consultation on Delivering Better Financial Outcomes.

The first consultation was released on 14 November and will close on 6 December. 

The five initial sections are superannuation, ongoing fee arrangements, financial services guide, conflicted remuneration and insurance commissions.

FSC chief executive Blake Briggs said: “The government’s first tranche of legislation contains a modest but important package of reforms that will start to simplify the regulatory framework without reducing consumer protections, and has the support of the financial services industry.
 
“This modest package of changes is just the start, however, to ultimately reduce the cost of providing financial advice, which has been pushed to over $5,000 by layers of regulation and red tape.”

Sarah Abood, chief executive of the FAAA, said: “We have been strong advocates for sensible measures from the review that will help advisers deliver more affordable and effective advice for Australians. 
 
“We are very pleased that Recommendation 8 on ongoing fee arrangements and consent requirements is to be included in the draft legislation. This recommendation is to consolidate ongoing fee consent requirements to a single standard ‘consent form’. Delivering on this recommendation will save many hours of frustrating, inefficient and unnecessary work for both advisers and their clients, and we are very happy to see this included in the first tranche of legislation. 
 
“Another piece of important news for our members is confirmation that commissions on life insurance (Recommendation 13.7) can continue to be paid to advisers, with a one-off written consent from the client before the beginning of the policy.”

However, both Briggs and Abood noted other recommendations made in the Quality of Advice Review had been held over for a later date, including abolishing the ‘safe harbour steps’, simplifying statements of advice (SOAs).

“These are important elements in cutting unnecessary red tape and have the potential to meaningfully reduce the cost of providing advice. We will be seeking further clarification from the government on the time frame for these measures.

“We are keen to see the government move quickly on the remaining recommendations to eliminate the remaining unnecessary red tape and ensure we can expand the availability and affordability of financial advice for all Australians. It is also important we see a quick turnaround on this draft legislation so real reforms are implemented as soon as possible,” Abood added.

“The FSC is pleased, however, that the Assistant Treasurer has offered a clear commitment to have a finalised government policy position on statements of advice and abolishing the safe harbour steps before the end of the year.” 

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