The Quality of Advice Review’s final report has delivered a blueprint for reform of the advice industry that puts consumers first, according to the FSC.
CEO of the FSC Blake Briggs says change to advice policy settings is overdue and “…the industry is ready to work collaboratively with the Government on a package of comprehensive reforms that can be in introduced to Parliament this year.”
Dead on arrival
Briggs adds that the thorough analysis by Michelle Levy and her Treasury review team “…means the scare campaign about a return to the ‘bad old days’ of conflicted advice that failed to put the interests of consumers first is dead on arrival.”
He says the final report “…rightly concludes that since the introduction of the design and distribution obligation, there is more scope to allow more forms of personal advice.”
Other areas the FSC highlights in a statement include:
- Best Interests Duty and ‘good advice’, and the Relevant Provider: The FSC says the final report strongly endorses the principle that advice should be outcomes focused, not process driven, and says these recommendations can achieve this objective in a way that ensures consumers receive more, not less protection. The final report recommends new consumer protections by expanding what is personal advice, and creating a ‘good advice’ duty to ensure advice is ‘fit for purpose’
- Disclosure and fee consent: It says the recommendations to abolish the SoA and the proposed overhaul of the existing fee consent obligations are long overdue and welcome. FSC research has demonstrated that abolishing SoA would reduce the cost of providing advice by almost $1000
- Design and Distribution Obligations: Recommendations to remove unnecessary red tape for advisers who are already subject to a best interests duty will help ensure advice is affordable and accessible
- Digital advice: The final report’s proposed reforms such as the removal of the safe harbour steps, simplification of documentary and disclosure requirements, will work holistically to enable more bespoke and more affordable [advice] to be delivered to consumers whether delivered via digital or traditional means
- Life insurance and conflicted remuneration: The FSC says it supports the retention of the Life Insurance Framework and proposed changes “…to ensure consumers are informed and consent to commissions prior to sale and understand the services they will receive from the adviser”
