FSC commences ‘submission development process’ for Quality of Advice review

The Financial Services Council (FSC) said it will be working with its members in its submission for December’s Quality of Advice review (QAR).

“…a whole-of-FSC submission development process drawing from the expertise of our advice, superannuation, funds management and life insurance members has commenced to an ensure the integrated development of detailed and informed policy solutions for the review,” FSC policy director, Zach Castles said.

“We are working with advice associations and other bodies to further the consensus on the objectives and reforms that has been achieved in the past two years and are identifying areas for which we can provide insights and research.”

The QAR – to be undertaken by Michelle Levy - will assess the regulatory framework in advice and whether parts of the regulatory framework have created unintended consequences.

The review will invite submissions from the public and consult with stakeholders, including consumers, industry, and regulators.

Late last month, Ms Levy confirmed in an issues paper that the QAR will look at some key recent reforms in the sector, including the design and distribution obligations, the retirement income covenant and the consumer data right; however, she reiterated that professional standards, which are currently under review by government, are excluded.

“Very simply: reform proposals that have consensus across the industry will likely succeed, and those which do not will likely fail,” Mr Castles said.

“Articulating the role and future of the licensee under a simpler framework is a key priority for our members. We seek reform that acknowledges advice is a profession in which advisers have greater control while updating regulatory net that has run its course.”

FSC policy manager Matthew Hawkes added that the QAR will determine the policy settings of life insurance “for years to come”.

“Therefore, this Review’s ultimate recommendations could be the difference between whether life insurance needs of Australians are met under a sensible framework that is in the interests of consumer outcomes, or not,” he said.

“Retention of the Life Insurance Framework is a crucial part of our broader advocacy of a simpler regulatory regime that does not diminish consumer protection. For decades, Australians have been purchasing life insurance policies to guarantee the security of themselves and their families in the event they become sick or pass away.

"With the rise of the ‘sole trader’, it is even more important now for hard working Australians to have access to appropriate risk-based policies to protect against incidence through the thousands of Advice providers across the country.”

Submissions on the issues paper close on 3 June 2022, while the QAR will be provided to the government by 16 December.

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.