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Proposal to allow banks, super to provide advice will remain in final QAR report

As the deadline approaches for Michelle Levy to submit her final report to the government, she confirmed that her proposal to allow non-relevant providers to provide financial advice will remain.

Speaking at the FPA Professionals Congress, in her final public appearance before she is due to submit her report to the government, the lead of the Quality of Advice Review (QAR) assured that non-relevant providers won’t be stepping on advisers’ toes.

Ms Levy doubled down on her belief that advice is episodic and that a diversity of providers, including banks, superannuation funds and insurers, should be allowed to provide it.

“This is intended to help you do your job,” Ms Levy told the advisers at the FPA Congress.

“I know that people worry about other people giving advice, but I just say don’t be worried.

“You have much more flexibility to go about exercising your profession in the way that you think is best for your clients.”

Ms Levy explained that by including non-relevant providers under the ‘good advice’ umbrella, she is enhancing consumer protections.

“One of the things that worries me a lot is not what you’re doing as financial advisers, but what people get every day when they speak to a financial institution and what they get is often very unhelpful general advice. And so, my proposal in the paper is that all personal interaction will be treated as personal advice,” Ms Levy said.

“You need to then adjust the duties that apply to that personal advice and again you've got to look at the full universe of people that will be giving that advice and I think it does need to be people's financial institutions.”

This proposal, she noted, will not change.

“I don't think all advice requires a professional,” Ms Levy added.

Delving deeper into how her ‘good advice’ model will govern this space, she explained that the ultimate responsibility will sit with the licensee and not the individual employee providing the advice.

“A really important part of the proposal is that obligation, when it's not a financial adviser, to give good advice is not going to sit with the person at the other end of the phone, the obligation will sit with the licensee,” Ms Levy said.

Using an insurance company as an example, she said “it's their job to work out what advice they are confident can be provided by their staff”.

“I expect that they would only be happy to give extremely limited and narrow advice without having a financial adviser.”

Levy says ‘not many’ surprises in final report

Overall, Ms Levy said she is “feeling more optimistic” about her final report.

Although she doesn’t know when the government will release the report to the public, she promised that “there won’t be many surprises there”.

“I don’t know when the paper will be released. I hope, quickly, but there are not going to be many surprises in there. I’ve been quite open about what I’m recommending,” Ms Levy said.

“I think in the main there is support, I know I have heard that there are some concerns, but I would ask everyone to sort of step back and look at the whole and say, ‘Is it actually good as a whole?’ And if it is, then encourage everyone you know to be saying that.”

Ms Levy does believe that among her proposals, there are some quick wins. These, she said, include changes to fee disclosure and the removal of statements of advice.

“So, statements of advice, removing the requirement for fee disclosure statements, I think they could be done very quickly. They are crossing something out. Again, I certainly think fee disclosure is not controversial. I don’t think anybody has spoken against it. The same with statements of advice, people don’t want them either,” Ms Levy said.

Ms Levy is expected to submit her final report to the government in the next three weeks, but the government has yet to confirm when its evaluation will be made public.

Comments (49)

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  • Can't wait to see her explain what good advice is and who will be regulating it.

    We might as well go into realestate and start providing financial advice.
    11
  • These are good proposals. Can everyone just calm the farm. Financial Planner and Financial Adviser remain restricted terms and the barriers to entry to be one remain high only open to those who have higher quals and standards = professionals. Consumers will work out the difference and any issues from product flogging will be for the product pushers to worry about. I for one don't want to provide industry fund comparisons for people to consolidate into one or the other - let the industry funds do that. Or comparing IP contracts. That is not the future of financial planning.
    -336
    • I think that view is a bit naive considering the past experience with product providers providing advice. And not so sure consumers will know the difference between advisers... they just get advice and if its bad then they think all advisers are bad. Even ASIC's own research shows that consumers don't always know what constitutes good advice.
      21
    • So your future of financial planning is not to provide any insurance advice to clients? I would suggest you are leaving your clients highly exposed and you are at risk of failing your best interests duty.
      13
    • just like consumers clearly understood the difference between general advice and personal advice.
      11
  • "Good advice". Hmmm. I've heard that idea before. Oh, yes, ASIC in the late 90's. That's 1990's for all you young things out there. ASIC's catchphrase was "Good advice is compliant advice"
    Full circle? No more like spiralling out of control.
    I shouldn't be worried. Too right. I won't be here long enough to be worried.
    0
  • Paul Tynan's view reported the other day, reflecting on the financial advice industry over the last 20 years was 100% correct. The Banks and Super Funds have held the power balance from the day they both started offering advice, and today that hasn't changed a bit. Financial Advisers have zero influence. The agenda in this QAR was there from day 1 and the submissions are merely for appearance only. The really sad and frustrating thing about this is that the advice Industry in Australia will never be a true Profession, whilst the balance of power sits with the big end of town. There is only one way of having any sort of voice and that is to let Minister Stephen Jones know that any move to halt the progress of Professionalism of Financial Advice (including allowing Banks and Super carve outs) will mean Labor will be shown the door next election. That is the only option.
    336
  • Two steps forward, 3 steps back. The sooner product pushers are removed from the advice industry the better.
    41
  • Reading between the lines - Treasury has provided Levy with a clear objective - "get the Banks and Super Funds back into the advice space, and soften the blow to advisers by removing a 'lil red tape" as a trade off. All discussed at Catalina over a few King George and Moet....
    86
    • Agreed, Treasury appears to be a major issue and potentially acting well beyond there scope - for reasons yet to be revealed.
      13
  • “Ms Levy is expected to submit her final report to government in the next three weeks, but the
    government is yet to confirm when its assessment will be made public”

    The government should just file her report
    under R for rubbish because it will be full of trash!
    54
  • At least ban them from selling their own products.....thats the root of most problems.
    10
  • At the behest of the Big Banks, this was always the plan from Josh Frydenberg and Jane Hume.
    Get rid of most of the financial advisers, bury the remaining ones under new taxes and red tape, and let the Banks and super funds provide the advice directly without the compliance burdens.
    Peter Johnson from the AIOFP is the ONLY member association calling this out from word for.
    76
  • "Using an insurance company as an example, she said "it's their job to work out what advice they are confident can be provided by their staff". "I expect that they would only be happy to give extremely limited and narrow advice without having a financial adviser." You cannot be serious...surely not...for real???
    79