QAR could deliver ‘desperately needed reset’ of advice

Ignition Advice said the federal government’s response to the final findings of the Quality of Advice Review (QAR) could “reset the rules around personal financial advice”.

According to Craig Keary, Ignition Advice APAC chief executive, the government’s response will alter the look of the advice industry in 2023. This, he noted, could benefit thousands of Australians. 

“This is an opportunity for a desperately needed reset of personal financial advice. We hope that the government opts to implement the review’s recommendations in their entirety, rather than being selective,” Mr Keary said.

Mr Keary added that the QAR was not about the interests of the industry and that lead reviewer Michelle Levy had a brief “to think about affordability and accessibility for the end consumer”.

“Post the royal commission, we have ended up with advice as a cottage industry, which has become unaffordable for many who would benefit from it. Tinkering at the edges will not help. Ms Levy clearly understood that and has indicated that her final report largely reflects the thinking in the proposals paper,” he said.

While there has been a lot of discontent over the QAR within the industry, Mr Keary explained that a majority of the industry has acknowledged that fresh thinking and a logical narrative was required.

“Ms Levy’s approach in starting with a ‘what’s possible’ model encouraged and fostered the industry to think about ‘how’ as opposed to ‘why not’,” he said.

“The objections we have heard are partly from those who benefit from the status quo, but also based on a misunderstanding of the scope of advice. Most contention has focused on product replacement, but this is just one small part of what Ms Levy would consider as personal advice.

“For material improvements to be achieved, realistic solutions must be considered including the role of technology to scale advice and make good advice affordable and accessible to all Australians who want and need it.”

Looking ahead, Mr Keary predicted that in 2023, many organisations will move from strategic thinking to strategic execution regarding digital advice.

“We are also seeing executives and their teams think more broadly about how technology can play a role in making advice more accessible and more affordable, while also making it available at a time when customers need it most”.

With headwinds and economic challenges “almost certainly” set to persist in 2023, Mr Keary believes the need for Australians to have safe and affordable access to guidance and advice has never been greater.