The Association of Financial Advisers (AFA), which has been supportive of the Quality of Advice Review (QAR), has said it is critically important for the future of industry to hear the voice of existing clients and the impact on them.
The industry body stressed that in recent years Parliament had introduced additional layers of bureaucracy with little consideration of the impact on the existing clients and whether they valued these measures or were willing to pay for them.
AFA highlighted the annual renewal requirement and client consent forms as well as the clients’ lack of flexibility to decide the timing of the renewal of their ongoing fee arrangements.
“This is set by when they first became a client and cannot be changed. The advice process and regulations should support the needs of clients, not make things more difficult for them,” AFA said.
“We believe that this existing client perspective is critical to incorporate in order to make sure advice is affordable and valued by clients.”
Other key themes that required review, according to AFA, should include the balancing of the benefits of each new regulatory requirement as well as the unintended consequences and the necessity to remove all non-value adding steps from the process.
AFA also stressed that adequate consideration of leveraging cross industry standardised systems and processes should be given as most were built on a licensee basis or a specific product provider basis, meaning advisers had to comply with the different systems and processes of each product provider they worked with.
“Classic examples are the client consent form solutions and Design and Distribution Obligation reporting,” AFA said.
The other key areas included regulatory uncertainty, risk-based compliance regime, encouragements for the new entrants as individual licensing.