New Quality of Advice Review says ‘one-size-fits-all regulatory regime has to change’

The Stockbrokers and Investment Advisers Association (SIAA) has put forward a key message that “the current ‘one-size-fits-all’ regulatory regime has to change” in its QAR submission to Treasury.

The industry body has put forward a number of recommendations including giving clarity on what constitutes personal and general advice, streamlining ongoing fee arrangements and consent requirements and changes to the law to reduce the “length and complexity” of statements of advice (SOAs).

The SIAA also addressed calls for safe harbour steps to be scrapped, saying that if it is to be repealed, the scope of what is required to satisfy best interests duty would need to be clarified and that Standard 6 of the Code of Ethics would also then need to be axed.

“While some in the industry have called for individual licensing, SIAA points out that this is not a proposal that works for its members as it fails to take into account the significant and complex capital adequacy requirements to which stockbrokers are subject,” the group said in a statement.

"SIAA has cautioned against any move to upend the regulatory framework to dismantle the AFSL system and force individual licensing upon all participants in the financial advice industry.

“SIAA also defends the role of general advice and considers that it plays an important role in the advice spectrum. Re-labelling general advice as ‘information’ does not take account of the fact that general advice must contain a recommendation or opinion to fall within in the term.”

SIAA added that the regulatory environment must be designed to accommodate consumer requirement and their preferences.

“SIAA’s members have been caught up in a regulatory regime in which regulators and policy makers have often applied a financial planning lens to the financial advice process and that has disadvantaged stockbrokers and investment advice firms and their clients,” the statement continued.

“SIAA has asked the review to consider the full range of financial advice services when undertaking its work.”

The SIAA’s submission follows a number of industry groups and businesses issuing their QAR recommendations to Treasury in recent weeks, including the FPA, AFA and ClearView.

The QAR, to be conducted by Allens Partner Michelle Levy, will be provided to government by 16 December this year.

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.