The government’s response to the Quality of Advice Review (QAR) was delivered in June, but the head of policy at the Financial Advice Association Australia (FAAA) believes it’s very unlikely that legislation to implement areas of the QAR will be ready this year.
Speaking on an upcoming episode of the ifa podcast, Mr Anderson said: “This is not going to be a quick fix”.
“We can’t just suddenly say advice documents will be five pages long and they suddenly become five pages. We need to focus on the change management that’s necessary to achieve this outcome, which is that advisers need to be confident with it, associations need to be confident, licensees, AFCA, and really importantly, ASIC needs to be on the same page as everyone else in doing this.
“So, I’m not going to predict that we’ll see draft legislation before the end of this year, but certainly in the early part of next year, we would like to ensure that we have legislation and then it pretty quickly moves through the process so that we can achieve the benefits sooner rather than later,” Mr Anderson said.
Reflecting on the guarantees Financial Services Minister Stephen Jones gave ahead of Labor’s election win, Mr Anderson said the one thing everyone can learn from this experience is to “be careful with what you promise”.
“Invariably, things take longer than you might hope at the start, and that means that … rather than over promise, under promise and deliver is probably the better way to handle it,” he said.
Namely, back in May 2022, Mr Jones promised he would act swiftly on things like the experience pathway. “Sworn in, consultation process, let’s get this done,” he said at the time.
However, the experience pathway was only introduced into parliament last month.
“We all want things to happen and we think the process is simple. But you go back and you have a look at the timeframe for implementing major reforms, the FOFA reforms that started on the first of July 2013 were kicked off by the Ripoll Inquiry that was released in November of 2009. So, look, this is nearly four years,” Mr Anderson said.
“Equally, you look at the royal commission, the hearings were in April of 2018. Really the last piece of that, the CSLR, has only just passed. So, it does take time. The other thing that’s really important is, so on a few different levels, whilst we think that Steven Jones is the Minister for Financial Advice, he’s actually the Assistant Treasurer and Minister for Financial Services,” he noted.
While acknowledging advisers want to see things implemented promptly, he added that “unfortunately it does take time and there are different steps that you have to go through”.
“There’s consultation on the policy, there’s the drafting of the legislation, and you’ve got to get access to the drafters. Then once you’ve got the draft legislation, you’ve got to go through the consultation process and there could be committees, parliamentary committees that consider the final legislation,” Mr Anderson said.
“And then you’ve actually got to see it through the Parliament, through both houses of the Parliament.”
In June, Mr Jones unveiled the government’s anticipated response to the QAR in front of a small audience of superannuation fund CEOs and senior industry executives. He announced, at the time, that the government will accept 14 of the 22 recommendations made by QAR lead Michelle Levy, and that “we can move quickly” on problems that have “a ready-made answer”, while “working together to solve the latter”.
ifa understands the minister has begun consulting with the associations and their members, with a broader consultation process set to follow later this year.
