Advice regulation needs ‘consumer-centric’ focus

“We’ve seen a raft of regulations over the years, we have regulation upon regulation, we’ve reformed reforms, it’s all about putting more regulation and rules in place, and it’s now at the point where it’s choking the industry,” said Mr Davison. 

“We need to go back to the start and look at how it actually impacts on consumers. We need to look at what consumers need and what they want, and how do we engage with the consumer.”

Speaking in the same podcast, SMSF Association policy manager Tracey Scotchbrook also agreed that the layers of complexity in the regulations are a big pain point.

“Other issues flow from the fact that the FASEA reforms and the way the legislation is structured is really focused on someone who’s a comprehensive or a full-service financial adviser. There’s no real contemplation of the different types of advice services and advisers that are out there in the marketplace,” she said. 

“[The Quality of Advice Review] is a really great opportunity to drill down into this and get these different advice services clearly defined and how advice can be delivered and really closely examined so that we can get that consumer-centric, cost-effective, functional model in place.”

BT head of financial literacy and advocacy Bryan Ashenden said he hopes the review takes a holistic approach and focuses on simplifying the requirements. 

“How do we have a system in place that says if I’ve got a client that only needs single topic advice, relatively simple advice, we can deliver that in an easy manner, and you can actually see that there’s a big difference in terms of the amount of time that is required and the amount of effort that is required to produce that piece of advice compared to something which is much more comprehensive,” said Mr Ashenden. 

“I think that’s where we see some of the struggles today, whether it’s a simple piece of advice or a more complex piece of advice, the time difference is not dramatically different, so it can take a long time to get that simple piece of advice because of the various regulatory obligations and regulatory hurdles.”

Mr Ashenden said it is very important that licensees and regulators are also comfortable with taking a different approach where not everything is disclosed to the client. 

“I think that’s ultimately what we want to see, not just ‘well that sounds good if you do it this way’. Let’s all get behind it and make sure that it can actually be delivered on. That’s going to be the sign of success,” he said. 

Chartered Accountants Australia and New Zealand financial advice leader Bronny Speed said it is impossible for consumers to understand all the current regulatory framework when so many different rules apply depending on the advice provided. 

“Let’s get onto a level laying field, let’s work in an industry where we are individual professionals responsible for our own activities and our own compliance, our own CPD, our own quality of advice,” said Ms Speed. 

“I think this will enable us to come up with a blank piece of paper that says ‘righto, consumer first’. How do we all as differing professionals within an industry provide advice that’s appropriate to a client and that doesn’t have to have 78 pages for one super contribution. Let’s get this a little bit more tailored like other professions are.”