Privately-owned financial advice network, Lifespan Financial Planning, has welcomed key aspects of the QoA Review recommendations, and its “bold approach”, but says deeper scrutiny of proposed changes is needed.
Lifespan CEO Eugene Ardino says recommendations to significantly reduce regulatory complexity and duplication in the advice industry were positives, as were moves to improve access to personal advice for consumers.
He notes that under the 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.”
However, he says, “…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 QoA Review recommendations.”
Ardino also praised Levy’s willingness to address some of the obstacles to advice delivery and problems with regulation head on.
He says that to make advice more accessible and affordable the compliance framework needs to be simpler.
…The question is, will those changes have the desired affect and what undesirable, unintended consequences may they produce…
“To achieve this there needs to be some radical changes – not just tinkering around the edges – and her proposals do just that. The question is, will those changes have the desired affect and what undesirable, unintended consequences may they produce?”
He notes that government has indicated there will be more consultation with stakeholders and expects to see “… a deal of lobbying from all stakeholder sectors as government grapples with the proposals and tries to work out what, how and when to implement.”
Ardino says 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.”
