Michelle Levy ‘absolutely’ agrees advice sector has been subject to ‘overregulation’

QAR reviewer Michelle Levy “absolutely” agrees that the local financial advice industry has been subject to a perceived “overregulation” in recent years.

Appearing on a new episode of the ifa Show podcast ahead of the QAR release set for December, Ms Levy addressed industry concerns about regulation and compliance, which also dominated submissions put forward by local groups in recent months.

“So when you say: ‘Some would say overregulation’, I would be one of those people. I’ve been a bit of a critic of the regime for a long time,” Ms Levy said.

“I think it has accumulated over time, and it doesn’t fit together very well. And I have worked with clients who are really struggling with it. I’ve seen the way the ASIC has tried to grapple with it. It isn’t working well for anybody.

“So coming into it when I was first approached about doing it, I was excited because I thought I’ve got all these ideas that had been rattling around my head for a long time, about how things could be improved.”

Ms Levy argued that “tinkering” with some of the reforms won’t make much of a difference and instead said that “quite significant changes” will need to be made to how financial advice and the provision of advice are regulated.

Adding to this, the Allens partner suggested that the current government is “acutely aware” of the issue that consumers need access to financial advice.

“I don’t think it is a matter of just crossing a few things out,” Ms Levy said.

“Now, is that realistic? I am hopeful that it is.”

She continued: “So I think there’s sort of momentum there, I think, to generate some change ... so where I have got to is I think that there are some quite big changes that can be affected quite simply in the law, which I am hopeful will make it easier for people to get advice.

“And the way you do that is by making it easier for different people to give advice.”

Listen to the full podcast with Ms Levy here.

Ms Levy’s appearance on the ifa Show comes after an appearance by the Association of Financial Advisers (AFA) chief executive Phil Anderson earlier this month, who said that 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.”

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.