The FAAA is “deeply concerned” about the latest Government advice reform announcements, saying the response could wind the clock back five years.
In noting that Financial Services Minister Stephen Jones has announced his response to the remaining streams of the Quality of Advice Review recommendations, Sarah Abood, CEO of the FAAA, says in a statement there is little detail available at this stage “…but on the face of it we are deeply concerned at the direction of these announcements.”
“Our members fear this could be winding the clock back five years on our profession,” she says.
“It appears to invalidate the hard work and pain that has been involved in creating financial advice as a profession and winning the trust of consumers.” (see: Insurers Welcome Financial Advice Reform Package).
Abood says that specifically, the Minister has announced that “…any financial institution will be able to provide personal financial advice to consumers, using people who are not financial advisers – yet who would be called ‘qualified advisers’.”
She says there is no detail on the qualifications that would be required “…however, they would be substantially less than what is currently required to provide financial advice.
“Thus, the proposed term is self-contradictory and extremely likely to confuse consumers.”
The FAAA says there are some positives in the announcement which it acknowledges and supports, saying:
- More support will be provided for scaled or limited scope advice, which is needed and welcome
- Statements of Advice will be replaced with a shorter, principles-based record
- The safe harbour steps will be removed
- Consumers will be able to pay for a broader range of advice topics from their super, including debt, their spouse’s circumstances, and age pension eligibility
- The Code of Ethics will be reviewed after this legislation is implemented
The FAAA notes that some of these changes were suggested in the final report of the Quality of Advice Review.
“We supported, in principle, the government’s initial response, which suggested a cautious approach, testing the more contentious changes such as the introduction of non-relevant providers to the advice space with super funds initially.
“There was a limited scope to the type of advice that could be provided and collectively charged because of the Sole Purpose Test. And these people could become, over time, the next generation of financial advisers and planners.”
…these ‘qualified advisers’ will provide something that passes for advice for free…
However, the association says that in this latest proposal “…these ‘qualified advisers’ will provide something that passes for advice for free, confusing clients and obscuring the important differences between information from a partly-trained salesperson, and comprehensive financial advice from a fully qualified professional.”
It says: “We created financial advice as a profession, but the government tied it up in so much red tape that the cost of proper financial advice is through the roof.
“We have separately responded more fully to the draft legislation on the stream one changes, but in summary we believe that legislation as drafted will have very little impact on reducing unnecessary processes, paperwork and compliance steps.”
The FAAA continues “…rather than fixing the red tape to get consumer costs down, the government appears to be handing back to institutions the right to hire minimally qualified salespeople, who call themselves qualified advisers, to sell their products to consumers.
“We will have plenty more to say on this in the days and weeks to come. In the meantime, we will be engaging members to ensure the final legislation delivers on the intent and goals of the review, to help consumers get the high-quality financial advice they need.”
I have always maintained that the running of the country is far, FAR too complex and important to be in the hands of the types of power hungry ego-driven self absorbed people that are attracted to being politicians. Very few of them have qualifications in ANYTHING and presuppose to tell others how to do things.
There are ‘some’, but very, very few politicians in the job due to truly wanting to make the country a better place. The rest are there to be perpetually elected and have their nose perpetually in the pig trough of pay, junkets and extraordinary benefits for very little if any real work. Here, today, with these so-called ‘announcements’ from Jones, we have the perfect example of doing more harm than good – absolutely stuffing things up royally – and they’re getting PAID handsomely from OUR TAX DOLLARS to create this idiocy.
I don’t know why more media pundits in a position of having a real voice don’t scream from the rooftops to eject these corrupted parasites. Elections ONLY offer more of the same – no real alternative, the result is always the same.
Ahem!! The word “qualified” has multiple meanings and is particularly ambiguous in the context of the current adviser debate. Qualified can, and in this case I believe, means “limited or restricted”. As such the alternate use of the word to mean educated or trained in specific skills may well be assumed by many or even most consumers, and therein lies the likelihood of an enormous “unintended consequence”. The millions of taxpayer’s funds spent on the RC and the QAR now, it seems, has wasted as we return to institutions flogging their own products and calling it advice.
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