MenuThe Financial Planning Association of Australia (FPA) welcomes the release of the final report by Michelle Levy in the Quality of Advice Review, and has called on the federal government to act on the report as quickly as possible.
Sarah Abood, CEO of the FPA, says it is imperative that the government acts quickly on the report, as the current regulatory framework is complex, hard to understand and costly to comply with.
“Too many Australians are currently unable to access the quality, affordable advice that they need. This is in large part due to the onerous and sometimes contradictory requirements that have been imposed in recent years, and which are acknowledged in the report as not meeting their goals.
“Ms Levy has consulted widely with advisers as part of her review of the law, and it’s clear she has heard the many concerns expressed. She believes, and we agree, that significant changes are needed to the way advice is provided in order to meet the needs of Australian consumers.
“She has also been consistent in recognising that financial advisers and planners are professionals and should be recognised and treated as such under the law, that quality financial advice is important and valuable, and that more Australians must be able to access it.
“We particularly welcome her recommendations on simplifying ongoing fee arrangements and enabling planners to consult and agree with clients how they would like their advice to be delivered.
“The FPA has been working with members for many years on improving ways to deliver advice, including innovative and more client-friendly initiatives such as video Statements of Advice (SOA). We are pleased Ms Levy has come to a similar conclusion about the issues with the current SOA regime.
“These changes would allow financial planners to speed up the advice process and give consumers more relevant information, also offering the real potential to meaningfully reduce the costs involved in providing advice.
“Minister Jones has previously stated that he was looking for ‘quick wins’. We believe that recommendations eight (simplifying ongoing fee consent), nine (removing overly prescriptive requirements on how advice must be presented to clients) and 13.7 (maintaining the ability for clients to choose how they pay for life insurance advice) are quick wins.
“These recommendations are broadly supported across the sector and have the potential to quickly improve consumer outcomes. They will also enable financial advisers and planners to provide advice more quickly and lower the costs involved in doing so.
“There are many other recommendations in the report and we welcome the opportunity to consult with government on these. Our goal is to help ensure consumers can receive high quality financial advice that will secure their financial futures.
“We are hopeful that the changes can be finalised after consultation and legislated with a bi-partisan approach. The previous Coalition government recognised the problems with the current regime and instituted the Quality of Advice Review, selecting Michelle Levy as the reviewer. The current Labor government has also recognised the issues, endorsed the review and its terms of reference, and supported Ms Levy continuing in the role.
“A healthy and trusted financial sector is critical to the Australian economy and to the wellbeing of consumers and we hope that our parliament can come together to make the much-needed changes.
“The FPA looks forward to working with government and the regulators to make the Quality of Advice review a success. We thank Minister Jones for his work in this area and his belief in the future of financial planning,” Ms Abood says.
