FSC calls for hasty adoption of QAR proposals alongside minor tweaks

The Financial Services Council (FSC) has urged the government to deliver affordable and accessible financial advice by implementing the Quality of Advice Review (QAR) proposals paper.

Labelling it a “sensible roadmap for affordable financial advice”, the FSC has recommended a few upgrades to the final QAR report.

“The policy challenge now is to achieve a regulatory framework that not simply stops bad advice but offers every incentive to deliver good advice for individual consumers,” CEO of the FSC Blake Briggs said in a statement on Monday.

According to the FSC, the reforms should be implemented in full coordinated by Treasury, industry and ASIC on a co-designed basis as soon as possible with a 12-month lead-in-time, that minimises disruption to consumers and businesses.

“This should include consultation with industry to determine prioritisation of guidance requirements and determination of ‘go live’ dates where the impact of a reform is cross-organisational,” the body said in its submission.

The FSC wants to see the QAR offer a level of regulatory oversight to industry, or the creation of an independent body equipped with the technical expertise to administer the new principles-based framework.

“Given the experience of industry to date under the current prescriptive framework, there is a wider question about a greater role for self-regulation or co-regulation under a principles-based framework where expertise and a practical understanding of advice will be an essential tool for supporting best practice and robust regulatory oversight,” the body said.

Moreover, the body said it supports the proposed redefinition of personal advice, the abolition of the Statement of Advice, and the introduction of a good advice duty, as well as “practical refinements” that have the potential to free up advice providers to “determine how they present advice to consumer that is more bespoke to their individual needs and circumstances”.

Mr Briggs underlined that the impetus is now on Minister Stephen Jones to make advice more affordable and accessible.

“Financial Services Minister Stephen Jones has made it clear to the financial advice industry [that] he understands there is an urgent need to reform financial advice rules, with 2,600 advisers leaving the profession in the last year alone,” Mr Briggs said.

“The proposals paper and our additional recommendations deliver a blueprint for him to address that.”