The FAAA congratulated Financial Services Minister Steven Jones on his \u201cstrong response\u201d to the Review.<\/p>\n
CEO Sarah Abood<\/strong> says it’s particularly pleased to see the support for recommendations \u201c\u2026such as the removal of Fee Disclosure Statements, rationalisation of fee consent, removal of the Best Interests Duty Safe Harbour steps and in-principle support for a major overhaul of financial advice documentation.\u201d<\/p>\n Abood notes that the Government has also “…provided certainty with the continuation of life insurance commissions, whilst introducing a consent obligation that is covered through existing client approval arrangements.\u201d<\/p>\n \u201cWe think that this first package of reforms will be a big step forward in helping advisers deliver more advice for Australians.”<\/p>\n She adds there are other recommendations that the Government has accepted require more consultation “…and how best to safeguard the advice Australians will receive from their super funds is an important part of this.\u201d<\/p>\n CALI – Important to Allow Life Insurers to Provide Limited Advice<\/strong><\/p>\n The Council of Australian Life Insurers is supportive of the proposed reforms to allow superannuation trustees to provide advice to working Australians, including advice about life insurance held within their superannuation.<\/p>\n The council believes \u201c\u2026it is important that Government legislation also allows life insurers to provide limited advice to Australians directly when they ask for it. Like superannuation trustees, life insurers have additional legal duties to act in good faith and prioritise the interests of their customers.\u201d<\/p>\n \u201cCALI CEO Christine Cupitt<\/strong> says this announcement is a good start \u201c\u2026but more needs to be done to help solve the unmet financial advice need for working Australians, not just those people approaching retirement.<\/p>\n …there are just 1,000 [advisers] …helping people navigate life insurance products, which makes reforms for life insurance advice an urgent priority…<\/p><\/blockquote>\n She notes that for many Australians, getting advice is too expensive or too inaccessible \u201c\u2026with just 16,000 financial advisers to turn to across the country. Of these advisers, there are just 1,000 who are helping people navigate life insurance products, which makes reforms for life insurance advice an urgent priority.\u201d<\/p>\n Where a consumer does not wish to engage a financial adviser, CALI believes the law should enable life insurers to provide limited life insurance advice.<\/p>\n The organisation also strongly supports the Government\u2019s decision to remove red tape and improve transparency around the commissions advisers receive on products.<\/p>\n TAL Response<\/strong><\/p>\n Life insurer TAL has expressed similar thoughts to the FAAA and CALI in its own initial statement in response to the Minister’s announcement this week.<\/p>\n It characterises Minister Jones’ decision as an important initial step towards reform to help more Australians access high-quality and affordable financial advice, but that there remains more work to do to better serve consumers.<\/p>\n Similar to the FAAA and CALI, TAL also takes aim at the Minister’s Stream Three agenda, which includes exploring new channels for the delivery of financial advice by other financial institutions: “We look forward to constructively engaging with government and all stakeholders on important reform that would enable life insurers to better meet their customers\u2019 simple advice needs, such as advising customers on their policy options to support affordability.”<\/p>\n The insurer says implementing Stream Three reforms would allow customers to engage more fully with their life insurer to ensure their insurance is fit for purpose, as their needs change, and against the backdrop of increased cost-of-living pressures<\/p>\n FSC – Right to Prioritise Stream One Reforms<\/strong><\/p>\n Meanwhile, the FSC\u00a0 also welcomed the Government\u2019s response and its CEO, Blake Briggs<\/strong> says the Government is right to prioritise its \u2018Stream One\u2019 reforms \u201c\u2026which will lower the cost of providing financial advice and improve consumers\u2019 experience when receiving advice.”<\/p>\n He says the FSC looks forward to working with the Government to deliver on its commitment to introduce legislation before the end of this year \u201c\u2026including strengthening consumer protections by tightening exemptions to the ban on conflicted remuneration and standardising consumer consents for determining a \u2018sophisticated\u2019 client.\u201d<\/p>\n The FSC notes the Government has also outlined a medium-term plan to expand access to financial advice around retirement and explore new channels for advice.<\/p>\n Briggs says that in its second and third streams \u201c\u2026the Government is at risk of unnecessarily restricting the number of institutions that can invest in new advice solutions, which could result in too many Australians missing out on quality financial advice at key stages of life.\u201d<\/p>\n He adds that superannuation funds will play an important role in providing retirement advice \u201c\u2026however if the Government narrowly implements key reforms they could fail to attract the industry investment that is necessary to deliver quality advice to the millions of Australians that would benefit from it at different stages of life.\u201d<\/p>\n He says the QoA Review\u2019s recommendations for a \u2018good advice\u2019 duty and allowing \u2018non-relevant providers\u2019 to provide personal advice “…were designed to have broad application beyond the superannuation sector, to encourage industry investment and ensure a level, competitive playing field.\u201d<\/p>\n It welcomes the Government\u2019s commitment to further consult and \u201c\u2026encourages the Government to remain open to applying the Quality of Advice Review recommendations beyond the superannuation sector.\u201d<\/p>\n![\"\"](\"https:\/\/riskinfo.com.au\/news\/files\/2021\/12\/Sarah-Abood-v2-e1639004204902.jpg\")
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