Last week, Minister for Financial Services Stephen Jones published the Quality of Advice Review (QAR) final report.
The report contained a raft of recommendations aimed at improving the accessibility and affordability of quality financial advice.
Lifespan chief executive Eugene Ardino said recommendations in the report to significantly reduce regulatory complexity and duplication in the advice industry were positives, as were moves to improve access to personal advice for consumers.
“Under the QAR recommendations, anyone, including employees of banks, super funds and product providers who currently provides general advice to existing clients, would be deemed to be providing personal advice and so would be subject to a higher standard having to satisfy a ‘good advice’ test and show that the advice was fit for purpose and relevant to the client’s needs,” Mr Ardino noted.
“However, the risk and possible downside is that there will be scope for unqualified people to give personal advice. We’ll need to work through as to what standards and restrictions would apply to those who are not Relevant Providers and are able to provide personal advice under QAR recommendations.”
Mr Ardino welcomed recommendations in the report focused on addressing some of the obstacles to advice delivery and problems with regulation head on.
“To make advice more accessible and affordable our compliance framework needs to be simpler. To achieve this there needs to be some radical changes — not just tinkering around the edges — and her proposals do just that,” he stated.
“The question is, will those changes have the desired affect and what undesirable unintended consequences may they produce?”
The government has already indicated that there will be further consultation with stakeholders.
“We expect to see a great deal of lobbying from all stakeholder sectors as government grapples with the proposals and tries to work out what, how and when to implement,” said Mr Ardino.
“The advice industry needs to really get its head around what is recommended, which is fundamental changes to cornerstone regulations. The industry needs to look at these from different and new angles with an open mind and while it may need time to do this it should be attended to as a priority.”
