Quality of Advice Proposal Paper offers pathway for advice industry

The Quality of Advice Review Proposal Paper offers a pathway for the advice industry to be able to focus on consumer outcomes and not be burdened with excessive regulation, says the SMSF Association CEO John Maroney.

Commenting on the Proposal Paper released yesterday, Maroney says it’s a “breath of fresh air” that, if implemented, could underpin the professionalism of the advice industry where the consumer is the primary focus.

“Where the Proposal Paper suggests removing the requirement for Statements of Advice (SOAs) to allow the profession to provide financial advice in a way that suits their customers, it concurs with the Association’s recommendations to the Review that certain types of advice should be able to be provided in a simplified form.

“We have long argued for the need to recognise the professionalism of the sector, cut excessive red tape, and put the consumer front and centre in the advice equation.

“We have also stressed that how advice is provided to clients needs to be commensurate with the level of complexity and the number of issues to be addressed. Simple, single-issue pieces of advice should be able to be delivered through a simple letter of advice.

“Currently, SOAs are risk management documents with a significant amount of their content compliance oriented. They have stopped being a consumer-centric document for the provision of financial advice and information.

“This is why the Association also agrees with the Proposal Paper when it notes that it can be difficult for consumers to get helpful advice, especially simple one-off advice, and get it at an affordable price.”

Maroney says the Quality of Advice Review comes at an important junction for the advice industry. Although many of the consumer safeguards implemented in recent years have been well-intentioned, the result has been to make it more difficult and costly for consumers to get financial advice.

“At the very time when it’s imperative more Australians have access to quality, affordable advice, the regulatory hurdles make that increasingly difficult. With this Proposal Paper there is an opportunity to create an advice framework that puts consumers first while still safeguarding their interests.”