The recommendations of the Quality of Advice (QOA) Review will make financial advice more accessible and affordable for consumers. That was the consensus of four industry experts at a Q-and-A session on the final day of the SMSF Association’s National Conference in Melbourne.
QOA Reviewer and Allens law firm Partner Michelle Levy said that the Review was not about keeping people happy. “It was about providing a framework in which financial advice can be offered in an
affordable and accessible way – something I don’t think happens now.
“My recommendations are driven by consumer needs, and rest on a strong foundation of law that protects consumers. The reforms proposed will not open the door to the poor and harmful advice
practices which led to the Hayne Royal Commission. Rather, they will lead to more consumers having access to personal advice that meets their needs – that is good advice.”
The QOA Review, an industry talking point for the past year, was the subject of a special plenary session, titled What happens next with improving the quality, accessibility, and affordability of the provision of financial advice? at the conference. The Inside Network’s Tahn Sharpe was the convenor.
The Review was instigated because of the complexity of the regulatory framework of financial advice, making it difficult to understand and comply with. Levy’s recommendations were handed to the Federal Government in December and released for discussion in February.
Financial Planning Association CEO Sarah Abood, describing the Review as a blueprint for the advice industry of tomorrow, said it proposed to take the industry from a tick-the-box approach to a
principles-based system in which advisers are recognised as professionals and responsible. “It recognises the adviser is on the same side of the table as the client, and this can only be a good
“For example, we see the recommendation to abolish statements of advice (SOAs) as a positive step. These documents can be 100 pages long and are not read by most consumers. Indeed, the Review
offers an opportunity to cut a lot of unnecessary costs.
“To reinforce Michelle’s (Levy) point, if a client rings up with a simple question, then they should be able to get a simple, low-cost answer. Certainly, we would suggest the quick implementation of
some of the less contentious reforms as a matter of urgency.”
SMSF Association CEO John Maroney said the Review was a “once in a generation” opportunity to get a better financial advisory system that delivered better consumer outcomes.
“Although the Association has some reservations about the report, and, in particular, the pressing need for accountants to be included in the broader church of advice that the Review is advocating, we believe it has the potential to be a critical building block to a more professional advice industry.”
The professional services advisory company, AZ Next Generation Advisory CEO Paul Barrett, who believes implementing the reforms will immediately lift advice practices’ bottom lines 20 per cent,
said professionalism was coming to the advice industry and it wasn’t waiting for the regulators or the policymakers.
“What this Review rightly does is challenge the regulatory thought process, of abandoning the tick-the-box mentality, and by doing so it is empowering advisers to be able to service their clients in a professional way – a brave new world. In my opinion, it will lead to advice practices that attract better talent, are bigger, more agile, and offer a greater array of services.”