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UPDATED: Accounting bodies welcomed the “bold recommendations” in the Quality of Advice Final Report yesterday and urged the government to follow up with action.
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Be brave about advice reform, Canberra told
09 February 2023
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Be brave about advice reform and act on the bold recommendations of the Quality of Advice Final Report, government was told yesterday by accounting bodies.
Consumers were hungry for good advice and but the sector was overburdened by regulations and the report findings were in the public interest, CPA Australia said.
“These are bold recommendations and we want the government to rise to the challenge and be equally bold in their actions,” said CPA Australia spokeswoman Jane Rennie.
“We want financial advice improved, not tied up in regulation and hamstrung by red tape. It's hard to argue against these recommendations. They're in the public interest.”
“We have experienced a decade of tinkering with the current reforms. It hasn't worked. Now is the time for bravery.
“Too many people have been left behind because of the advice gap. We don’t want to see this opportunity to improve millions of Australians’ lives go to waste.”
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The 267-page report includes 13 recommendations, many of which were previewed in early form by the QAR Proposals paper last August.
They include redefining “personal advice” to take in financial advice that must be supplied by a “relevant provider”; applying a good advice duty to providers; allowing superannuation trustees to provide advice to members; and a reduced requirement for documentation, especially regarding statements of advice and fee consent arrangements.
Ms Levy said if the recommendations were adopted, it would be easier for accountants to provide financial advice although there was no reason to exclude them from the regulatory framework.
“The recommendations I make in this report will make it easier for all advice providers, including accountants who are authorised by an AFS licensee to provide this advice, to provide personal advice to their clients. It will also make it easier for them to provide limited or one-off advice,” she said.
“For all of these reasons, I am not recommending any changes to the advice accountants (and more broadly registered tax agents) can give. I think there are sufficient exceptions and options that accountants and registered tax agents can choose from to adapt their business model as required, depending on what advice they want to provide to their clients.”
Assistant Treasurer Stephen Jones thanked Ms Levy for her work on the review and said the government would consult widely on the recommendations.
“Australians need access to quality, affordable financial advice to plan for their future,” he said. “Anyone with an interest in financial advice should read it and make their views known.
“We want to see an industry with strong professional standards that’s accessible for more Australians and look forward to hearing views on achieving that goal.”
The latest figures on adviser numbers show people continuing to desert the industry, with 15,529 advisers as at 31 December – a 17 per cent reduction.
CA ANZ superannuation and financial services leader Tony Negline welcomed the government’s commitment to consult on the report and also advocated a decisive response.
“Broad action needs to be taken to reduce cost of providing financial advice – small piecemeal changes will not work,” he said.
Ms Rennie said the report put consumers first with a statutory duty for financial advisers to act in the best interests of their clients and give “good advice”.
“Many of the proposed changes to the way advice is provided will help improve consumer protections, including scrapping unwieldy and complex disclosures,” she said.
“These recommendations will help ensure clients are properly informed and empowered to make better decisions.”
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