QAR proposal paper shows ‘perfection has become the enemy of good’
The QAR proposal paper, released last month, highlights how changes intended to help the sector, actually hindered it, says an advice technology specialist.
Ignition Advice said increasing costs and declining financial adviser numbers since the Hayne Royal Commission has seen advice become more complex and less accessible.
In its analysis of the paper, the advice technology specialist said: “If there’s a theme running through the Quality of Advice Review proposals, it’s that perfection has become the enemy of the good when it comes to financial advice in Australia.”
The group has backed key proposals put forward by Michelle Levy, including the provision of “good advice”, the relaxation of documentation requirements such as statements of advice and the delivery of digital advice.
Ignition Advice Asia Pacific CEO, Craig Keary, has argued that while Australia has a “large advice problem”, it is very resolvable and a good advice standard is one example.
“Ms Levy offers a new model — good advice. She is explicit that this is not necessarily the ‘best’ advice in any situation, but advice which is reasonably likely to benefit the client based on their circumstances at the time the advice is given,” Keary explained.
“While no set of proposals is perfect, the good advice model offers a realistic path to high-quality financial advice being available to all Australians who would benefit from it, in ways that are accessible and affordable.
“In particular, the proposals paper offers an approach to broaden how advice is provided via more institutional involvement, and a wider spread of people within institutions delivering simpler advice.
“Consumers expect advice from their institution, institutions should be providing it, and ultimately, digital advice will make this achievable in a fully compliant, affordable, and accessible way.”
Ignition are yet another industry group that has responded positively to the proposal paper, which follows praise from the Joint Associations Working Group (JAWG), the SMSF Association and the Financial Services Council (FSC).
“The paper sets out proposals to make it easier for consumers to have meaningful, fit-for-purpose conversations with their advice provider about all or part of their financial and lifestyle objectives while maintaining robust consumer protections — an objective the JAWG supports,” a statement from JAWG read.
“As a coalition of associations, the JAWG understands and values the broader community good and significant social benefits that come from financial advice done well, and we look forward to continuing our engagement with Treasury, Government and other stakeholders to advance this agenda.”
Ms Levy recently discussed progress on the QAR on the ifa Show podcast. Listen to the full episode here.
