The JAWG – made up of 13 key associations including the FPA, AFA, FSC, SIAA, TAA and CA ANZ – has penned an open letter to Stephen Jones regarding the Quality of Advice Review (QAR) and the government’s impending response.
In the letter, JAWG said it wants to “collaborate with the government on implementing much needed change” to ensure “many millions more Australians can access advice for decades to come”.
“We note your strong support for the Quality of Advice Review process under Michelle Levy since its inception. We are grateful for your acknowledgement that financial advice is out of reach for most Australians, in part because of poor regulatory settings,” the group said.
It stressed that the government’s response to the QAR “should be driven by the needs of everyday Australian consumers”.
“The number of Australians who now receive financial advice has fallen by around half. At the same time the number of advisers has dropped to around 15,800 from over 26,500 in 2019. The average cost of financial advice has increased steadily to over $5,000.
“Urgent action is needed, the government has a rare opportunity to deliver affordable and accessible advice to consumers as an outcome of its response to the Quality of Advice Review,” the group said.
It noted that some “stakeholders continue to argue for the status quo without offering real solutions for the many Australians who retire each year without financial advice”.
As such, JAWG said that any response to the Quality of Advice Review must increase access to quality financial advice, while maintaining appropriate consumer protections that are proven to work in the interests of consumers.
To the JAWG this means the government’s package will only succeed if it:
1. Ensures consumers can get scaled advice, that is the advice they want, how they want it, and when they want it, including via digital means.
2. Supports a professional financial advice sector, by increasing the number of financial advisers and financial advice providers, while maintaining a level playing field.
3. Removes regulatory and disclosure requirements not benefiting consumers.
4. Reduces the time and cost to prepare quality financial advice.
5. Establishes a regulatory approach that facilitates the provision of financial advice without uncertainty or shifting goalposts.
“We believe that many of the final recommendations of the Quality of Advice Review are aimed at achieving these objectives. But Australian consumers will be left behind without the adoption of a holistic package of reforms. The reforms must extend beyond easy wins such as streamlining fee disclosure requirements and iron-out obligations like the design and distribution obligations,” JAWG said.
“The government should commit to implementation timeframes that would see consultation with industry on a holistic package of reforms that are introduced into the Parliament this year,” it continued.
“We look forward to the release of the final report. Following its release we would welcome the opportunity to meet to discuss how the government can improve the financial wellbeing of all Australians by ensuring they have access to quality financial advice”.
