Westpac backs distinct value of advice
Financial advisers provide advice that is conceptually distinct from credit assistance provided under the Australian credit licence regime, and this needs to be appropriately recognised in any proposed regulatory changes, according to Westpac.
Westpac has pointed to the value of advice provided by financial advisers in a submission filed with the Productivity Commission inquiry into Competition in the Australian Financial System.
It said that, in particular, financial advisers considered risk of loss of an investor’s capital, while credit assistance involved facilitating the distribution of credit products to customers that were affordable and met their requirements and objectives.
It said that while, in theory, the existing knowledge, skills and resources of Australian financial services licensees (AFSLs) and authorised representatives (financial advisers) would appear relevant in providing advice in relation to credit products, such as personal loans, credit cards and mortgages, the distinct differences needed to be understood and taken into account.
The Westpac submission was supportive of renaming ‘general advice’ but urged a lengthy transition regime to achieve such an outcome.
“While we are supportive of recommendations to improve customer understanding, we note that industry consultation and consumer testing will be needed around the appropriate labelling and scope of a new ‘general advice’ category, supported by a carefully considered transition regime (greater than 12 months) given the implications of such a change,” the submission said.
It said that, in particular, it would be important to consider the appropriateness of the current laws in light of rapidly evolving technology to ensure that any reforms were technology neutral and therefore suitable in an increasingly digital world.
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