This week’s ifa Show podcast will feature special guest and Quality of Advice Review (QAR) reviewer, Michelle Levy.
Ms Levy joined the podcast to discuss the progress on the review set to be released in December, her reaction to some of the submissions put forward to Treasury and her hopes for the financial advice sector following the QAR.
“What I hope will flow from [the recommendations] is a diverse industry where people are able to get advice all over the place, appropriate to what they’re looking for at the time,” Ms Levy said on the podcast.
“I want open, helpful, personal conversations across the whole financial system and I want our consumers to feel confident to engage across that system and to feel confident to go to financial advisers.
“Again, that’s a real problem. People don’t feel confident at the moment about doing that.”
Speaking on a recent SMSF Association panel, Ms Levy said one of the most surprising aspects she’s found in her role leading the QAR is the level of fear felt surrounding ASIC and AFCA.
“I am actually taken somewhat aback and, maybe I shouldn’t be, but there’s a real concern that very minor breaches or very minor things are going to lead to very serious consequences,” said Ms Levy.
“If you look at the cases that ASIC has actually brought, they are in the main quite serious issues so that surprises me and that’s a hard one to solve. How do you address fear? It’s obviously having a big effect on what people do.”
Meanwhile, on an episode released earlier this month, the Association of Financial Advisers (AFA) CEO Phil Anderson said the QAR must look at the “significant layers of bureaucracy” forced on the advice sector in recent years.
Mr Anderson said it doesn’t surprise him that many of the QAR submissions issued to Treasury have recommended the regulatory burden placed on planners be reviewed.
“When you think about it, we’ve had such a period of vigorous, almost constant regulatory reform that is just built over the top of each other,” Mr Anderson said.
“So we’ve had the FOFA reforms, we’ve had the LIF reforms, we’ve had professional standards. We’ve had all the recommendations out of the Royal Commission. On top of that, you’ve had DDO and a range of other reforms. It’s all just one layer on top of the other layer.”
The ifa Show podcast with Ms Levy is set for release this Wednesday (24 August).
In the same way that Albanese is prioritising the Solicitor General drilling down on Scomo’s self-appointments and questioning the lawfulness and conduct of this, so too should the new Minister of Financial Services Stephen Jones be reviewing the previous advice reforms and legislation rushed into place by O’Dwyer, Frydenberg and Hume. A highly conflicted financial services lawyer reviewing QAR submissions is akin to ‘Winnie the Pooh’ asking ‘Piglet’ if the honey jar is too sweet. If it’s OK for ASIC to retrospectively apply their version of the Corps Act beyond FOFA back to 2008 how they see it on any given day, then it should be open for the incumbent Minister to repeal all of the bad regulation that is currently hindering the transition to professionalism.
The Governments QAR will likely be the last straw in my books. I have spent time reading through the submissions which all follow the same narrative, regulation/ compliance overkill. If positive change isn’t made on the back of this I see an accelerated exodus of planners from the already decimated industry. Several colleagues of mine all share the same view. Enough is enough. The walls are closing in Michelle…
AGREE!
[i]”How do you address fear?”[/i] What an insult. To suggest financial advisers are worried about nothing is a very worrying sign. My slim hope for positive change has been dashed with this appalling comment.
Yep typical Govt review. Lawyers and Bureaucrats with Zero Idea finding results and solutions that continue strangling advisers to death.
[b]Blame Advisers is the first step. It’s Adviser Irrational Fear causing all the problems. [/b]
Do not take any Advisers submissions into account.
Develop more useless compliance, red tape and compliance and try to sell it as an improvement.
If I want legal advice I go to a lawyer, if I want medical advice I go to a doctor, if I want tax advice I go to an accountant, if I want my teeth fixed I go to a dentist, if I want electrical wiring fixed I go to an electrician, if I want financial advice I go to……”all over the place”.
Where’s the review in the legal industry? Their whole ‘profession’ is based on overcomplicating everything on purpose, so that the average person has no idea what they’re supposed to do just to meet their obligations. Then the client has no choice but to pay absurdly high legal fees.
Too many lawyers in parliament- that’s why they get no scrutiny and we continue to get scrambled eggs for legislation.
OK Advice All over the place =
– [b]Intra Fund Advice expansion[/b] to cover any advice requested by ISA Members for the masses. All paid for by more Hidden Commissions, no FDS required of course & most members paying hidden commissions for no service.
– [b]Finfluencers continue as is[/b], zero compliance, zero care, zero risk, Scam as many people as you can.
– [b]Accountants carry on providing as much AFSL advice as you like, now legally approved[/b], zero AFLS compliance required. ASIC never busted 1 accountant for illegal AFSL Advice anyhow. Those Accountants stupid enough to get a limited AFSL, stop being stupid and cancel Limited AFSL immediately.
– Robo Advice carve out of any compliance for big banks, AMP etc to provide direct Investment & Insurance flogging sales with zero compliance. The current mass over compliance means it’s impossible to provide Robo Sales that would be compliant, so Robo Sales are exempt.
– [b]Real Advisers have 15 forms to be signed each year by clients to provide advice [/b]and if you want to get paid you will need to have a new FDS signed each month, 12 FDS’s required pa. Plus FSG, FARSEA & TMD catch all compliance forms required to be signed annually too. Zero reduction in any Real Advisers compliance as they are the cause of all problems.
Review complete.
Thanks Michelle
Honestly please stop all these reviews and changes we have changed nearly every year since the royal commission and I would much prefer that the government just leaves us alone.
It a wonta be easy under the Albanese.
Nothing like saying what you want before the review is done. Why have the review then? And what does “advice from all over the place” mean, other than from unqualified people?
Butchers
Taxi drivers
Tik Tok
Meta
Journalists
Television
Radio
ISN
And a few remaining licensed financial advisers
“What I hope will flow from [the recommendations] is a diverse industry where people are able to get advice all over the place, appropriate to what they’re looking for at the time,” Ms Levy said on the podcast.
Anyone else concerned to hear that Ms Levy is talking about leaving advice only up to what people are looking for at the time without any mention about what they may actually need?
These two things can be very different as many advisers would know so feel this should be called out and good luck to those of you who remain…
“Called out?” If only… Advisers have been calling out for the last 10 years, only for Govt., Treasury, ASIC, AFCA, Associations and every other stakeholder to close these ears, eyes and turn the other way. This is the last roll of the dice.
translation – “I’m not prepared to remove the handcuffs”…
And it seems she is prepared to allow everyone else to provide advice “all over the place”. Someone remind me again why we did all the qualifications?
The whole train wreck ……is getting worse.
Didn’t think it was possible – but it will.
Maybe Ms Levy should look at some of the ASIC actions around minor FDS errors, BID etc.
Maybe then she won’t be taken aback as much.
The QAR is shaping up as an epic fail – once again we have a lawyer rather than business person in charge…
Yes, it always appears too difficult for tom appoint someone from the profession to conduct these reviews. That’s why we always end up with clueless people making disastrous recommendations, which are then screwed up further by even more clueless politicians.
Wow, just wow. I’m not at all hopeful.
Agree 100% not one bit surprised, same old same ‘ol bureaucratic pandering review, from 1 single lawyer. This is a perfect opportunity for a committee / Industry body full of financial advisers (both old and new) to takeover from Govt. Treasury and ASIC. Seriously – financial advisers have more than earned to have respectful representation.
AFCA remain the biggest threat to the Financial Planning Industry, ASIC whilst they may interpret differently are bound by the law, AFCA however take pride in not being bound by Corporations Law and their whats reasonable approach is only ever in favor of the complainant and never the Member. They actually wrote in a decision made against a General Advice adviser that they had caused the loss by “not taking into account the clients personal circumstances when providing the Advice”.
It is why AFCA are continuing to lose when challenged in court, but it is too late and the usual outcome is that the matter is referred back to them to redo.
AFCA need to have a top to bottom review and changes made so that Procedural fairness is not an aspiration but a requirement. Those Ombudsmen that are censured by the courts should not be allowed to remain hearing the cases, a Financial Planner doesn’t get that luxury.
There’s a much simpler solution to the AFCA problem Mike. Just remove financial advice from AFCA’s jurisdiction altogether. AFCA should only be focused on product providers. Financial advice complaints should be dealt with by the so called “Single Disciplinary Body”.
“I am actually taken somewhat aback and, maybe I shouldn’t be, but there’s a real concern that very minor breaches or very minor things are going to lead to very serious consequences,” said Ms Levy.” Obviously she hasn’t seen the public announcement from James Shipton that ASIC wants to see “heads on sticks” or read the mental health survey (as recently published here by IFA) which highlighted how dire the mental health of a significant section of our Industry was, and the fact that over a 2 year period 30 advisers have committed suicide.
Yes, millions are now getting online advice from Finfluencers, as they are not buried with the ridiculous Hayne2 annual fee renewal document nightmare, bureaucratic red-tape that simply doesn’t exist in any nation on Earth, apart from Australia. Until the Govt winds back this Hayne2 red-tape mess, millions of time poor Australian families will be denied access to cost affordable advice.
It isn’t just the fee consent madness. It’s loads of other things. RoA for intra fund advice ? Why ? The RoA document itself ? SoA for basically every piece of Advice ? Why ? The very nature of the SoA document ? 90 pages for a plain vanilla Risk SoA – insane.
Still describing financial advice as being an industry, I see. Until regulators recognise us as professionals, and the rest of financial services (banks, insurance companies, ASIC AFCA, ATO etc etc) being money managers and regulators, I don’t think anything will change. Don’t lump us all together.
We are arguably professionals….. but only it seems when it comes to having penalties imposed.
Good to see the people in the Ivory Tower from time to time but I am surprised she is ‘actually taken somewhat aback and, maybe I shouldn’t be” – I thought the Bureaucrats knew everything? Never mind, more money being spent on bureaucrats doing reports keeps bureaucrats in the Ivory Tower.