Many Voices, One Message – Association Joint Response to QoA Review


In a rare moment of unity, 12 industry associations have come together to make a joint submission to the Treasury’s Quality of Advice Review.

The submission calls for a more consumer-focused regulatory approach, reduced costs, and greater recognition of professional judgement.

It says existing regulatory requirements are confusing, complex, and overwhelming, delivering what the group refers to as “…a one-size-fits-all advice process that neither caters for, nor considers, the individual needs and circumstances of each consumer.”

The submission adds that the issues stemming from the current arrangements imposed on the financial advice sector could be addressed “…by ensuring advice is less costly to produce and presented in a way that is meaningful and more easily understood by individual consumers, under a principles-based, consumer-focused regulatory framework that encourages professional judgement.” It articulates five agreed key themes:

  1. Consumer Focused

The Quality of Advice Review should result in outcomes that support access to affordable and quality professional financial advice for all Australians and ensure consumers’ interests are protected and advanced when accessing financial advice.

  1. Recognition of Professionalism

This shift is not reflected in the regulatory framework that was designed for a different era of conflicted remuneration…

There has been a significant shift in the professionalism of financial advisers.  This shift is not reflected in the regulatory framework that was designed for a different era of conflicted remuneration and vertically integrated organisations where ‘advice’ was considered by some as a sales and distribution channel for inhouse products.

Changes to the regulatory environment should recognise the professionalism of financial advisers and enhance the reputation and health of the financial advice profession as a whole.

  1. Regulatory Certainty

Financial advisers, when providing financial advice to consumers, are required to comply with multiple laws and regulators, with additional oversight from AFS licensees and professional associations.  Also, they are subject to decisions made by an external dispute resolution scheme, the courts, and the Financial Services and Credit Panel (FSCP).

This complex legislative and regulatory environment …has resulted in licensees and advisers being in fear of making even a minor compliance error or a mistake

This complex legislative and regulatory environment, with a one-size-fits-all approach to different types of advice and advisers, and ‘zero’ tolerance for mistakes and compliance breaches, as well as onerous civil and criminal penalties, has resulted in licensees and advisers being in fear of making even a minor compliance error or a mistake. This leads to double, if not triple checking of all aspects of advice being provided and over-engineered systems and processes, which add additional cost to and delays in providing advice to consumers.

Regulatory certainty needs to be introduced and duplication removed to provide for a regulatory environment that provides consumer protection without adding significant cost and complexity to the provision of advice.

  1. Open Data and Innovation

Improving data quality, developing and implementing standard forms for standard processes, providing broader access to financial advisers of already available data (e.g., MyGov, Centrelink) and applying Consumer Data Rights (CDR) as well as consistent principles across financial services will improve the client experience, reduce errors, reduce the time taken to provide advice and reduce the cost of providing advice to consumers.

  1. Sustainability

A sustainable advice sector, in all its forms and propositions across the continuum of consumer advice needs, is essential to ensure that Australians can access affordable quality advice from their choice of trusted advisers. Issues impacting sustainability are often interconnected and lead to a mix of responses: substantial reduction in adviser numbers; limited new talent joining the sector; inequity in parts of the financial advice ecosystem; the costs (time, people, focus, financial) of adjusting to a consistently high volume of regulatory and legislative change; rising operational costs; and a lack of regulatory certainty, are all examples of these issues.

Ultimately, these sustainability pressures impact innovation, investment and competition which underpin a flourishing and dynamic financial advice sector that provides consumers with choices and options. Sustainability of the advice sector has broader socio-economic implications for Australia – the more Australians can build their financial independence, resilience and well-being, the less pressure there will be on governments to fund Australians who are in a less than sustainable financial position. The financial advice sector has an important role to play in reducing this pressure.


The submission makes several recommendations and observations that include a call to make initial and ongoing advice fees tax deductible. It advocates for:

  • Establishment of a regulatory regime that supports an advice process aligned to professional judgement and the situations of individual consumers guided by professional standards, as opposed to compliance with prescriptive regulation, which the working group notes has several advantages including lower compliance costs via a risk-weighted approach to advice outcomes, and recognition of the advice sector as a profession.
  • The removal of the safe harbour steps from the Corporations Act, and clarity on what is needed to satisfy the Best Interests Duty.
  • Open data and the sustainability of the financial advice sector must be key prerequisites to improving access to affordable quality professional advice and encouraging innovation in the sector. There is a significant amount of unnecessary waste in the system that leads to additional cost, time and resource requirements for consumers and advice providers. Much of this waste could be reduced or eliminated through access to up-to-date and reliable data that is already available within the financial services ecosystem.
  • A profession-wide position on the tax deductibility of initial and ongoing advice fees and a review of the ASIC industry funding model.
  • Retention of professional standards and education requirements while reviewing the one-size-fits-all education pathway with respect to current and potential advice specialisations and business models.

The 12 associations participate in an established Joint Associations Working Group, which represent Australia’s financial services industry and professional financial advisers. Collectively, these associations represent more than 90 per cent of advisers on ASIC’s Financial Advisers Register:

  1. Association of Financial Advisers
  2. Boutique Financial Planning Principals Association Inc.
  3. Chartered Accountants Australia and New Zealand
  4. CPA Australia
  5. Financial Planning Association of Australia
  6. Financial Services Council
  7. Financial Services Institute of Australasia
  8. Institute of Public Accountants
  9. Licensee Leadership Forum
  10. Self Managed Super Fund Association
  11. Stockbrokers and Investment Advisers Association
  12. The Advisers Association Ltd

Click here or on the image below to access the Joint Associations Working Group submission to the Treasury Quality of Advice Review Issues Paper: