'Significant' change expected to come from QAR, but process may take some time

An industry head believes "very significant" change will come from the upcoming QAR, but expects that it will take some time before the changes take effect.

On the latest episode of the ifa Show podcast, the Association of Financial Advisers (AFA) CEO Phil Anderson discussed his expectations about the QAR once it's released on 16 December.

"I think we are expecting that it will most likely lead to [a] very significant change. We expect that. We won't know for sure until we get to the end of the process," Mr Anderson said.

"But material change, particularly where it will involve changes to the Corporations Act, will take time to implement.

"So, we would anticipate that we will get significant recommendations, but it might be 12 months before we actually get to see legislative outcomes, and then it might be a transition period beyond that."

Mr Anderson said the industry would most likely be forced to wait for government to respond to the review recommendations, then for Treasury to draft legislation, followed by a consultation process before anything can go through parliament.

While he doesn't expect it to be a quick process, Mr Anderson said the financial advice sector has reason to be optimistic that the QAR will "get to the core of some of the problems that we have".

"We would expect to see some very material recommendations that we would very much hope will make a significant difference to dealing with the issues of access and affordability of advice," he said.

"But also the efficiency of the advice process and the removal of unnecessary red tape and bureaucracy; just a significant impact on the efficiency of delivering financial advice."

In its own QAR submission, the AFA called for regulatory obligations for the provision of financial advice to be “proportionate” to the level of complexity and risk of client detriment and that a three-year relief period be put in place for client consent forms “to allow for a standardised industry-wide system solution for the collection and transmission of these forms to be developed”.

As previously noted, the AFA recommended the best interests, duty-safe harbour be removed and that existing issues with FDS compliance be addressed.

On the same episode, Mr Anderson also called for QAR reviewer Michelle Levy and Treasury to address the "significant layers of bureaucracy" forced on the advice sector in recent years and also said he expects that the Albanese government will make good on its promise to address education standards in the financial advice sector.

Listen to the full episode with Mr Anderson here.

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.