One of the strong messages sent to delegates attending the 2022 AFA Thrive Conference has been that the over-riding purpose of the Quality of Advice Review is to implement changes that will deliver more affordable quality advice and to make that advice more accessible to more Australians.
This message has been emphasised by both AFA CEO, Phil Anderson, in his call to the sector to support many of the changes proposed in Michelle Levy’s Quality of Advice Review consultation paper, and also by Levy herself, when she addressed the AFA Conference this week.
Levy shared with delegates a brief summary of the proposals she has made in the QoA Review consultation paper, which include consideration of the nature of advice – redefining what constitutes personal and general advice – together with the obligations that should apply to the provision of personal advice.
She told delegates this obligation attaching to the delivery of personal advice should be framed within a ‘good advice’ imperative, rather than having the adviser adhere first to delivering advice within the current requirements of the Best Interest duty. She has proposed that the current law, which mandates a duty of Best Interest within the Corporations Act, should be replaced with a duty to deliver good advice.
…the process should be driven by the advice; not the other way around
Levy notes this is what customers keep saying they ultimately want – good advice – and that her proposal represents a big shift because the current law focusses very much on process, with the requirement of the Best Interest duty and duty of priority. Currently, she says the law is the wrong way around, in that advisers must first tick the compliance boxes to demonstrate they have served their clients’ best interest. Rather, she says, the process should be driven by the advice, and not the other way around where the advice is currently driven by the process.
The independent reviewer noted, however, that the best interest requirement would still apply, but through the adviser Code of Ethics, rather than via the Corporations Act.
Levy outlined her rationale supporting other proposals included in the QoA review consultation paper, including her set of proposals around disclosure and the removal of the requirement to provide written Statements of Advice except when requested by the client.
