‘Slashing advice paperwork’ top priority for industry reform

Ahead of the Quality of Advice Review (QAR) set to be released in December, ClearView has called for three key areas to be addressed in its 2022 reform agenda: “Slashing advice paperwork, no further changes to risk commissions, and measures to support stable, sustainable income protection solutions”.

ClearView managing director Simon Swanson has backed calls for a “slimmed down” record of advice to replace the statement of advice (SoA), particularly in cases where simple advice is being delivered.

The group’s reform agenda cited research that the cost of an SoA has increased by over 30 per cent in the last four years.

“The devastating impact of COVID-19 and a spate of natural disasters, including the recent floods in NSW and Queensland, have heightened awareness of the importance and value of professional advice,” Mr Swanson said.

“However, this trend is occurring at a time when the cost of operating an advice business is significantly increasing and, in turn, pushing advice fees higher.

“It is important that our regulatory system is fit for purpose and does not add unnecessary complexity.”

On a recent episode of the ifa Show podcast, founder and CEO of WOW Women’s Group Tracey Sofra slammed the SoA process as “horrendous”.

“I feel like the client's in the corner and everyone's huddled up worrying about all the stuff. If I could just say this, when I present a plan to a client, they don't really care about the SoA. They just care about what I've got to say.”

ClearView also supported APRA’s recent move to defer five-year contract terms for income protection products for at least another two years, with Mr Swanson saying it’s crucial for life insurance solutions to be stable and simpler for consumers.

“ClearView welcomes the revised approach and we support APRA’s ongoing sustainability work,” he said.

“We recognise the importance of engaging with Treasury on issues about product rationalisation and quality of advice, and strongly advocate for engagement with financial adviser bodies, licensees and advisers.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.