Levy admits final report is long, makes ‘hard’ recommendations and lacks ‘modest’ change

At an event held in Sydney on Tuesday hosted by communications agency PritchittBland, QAR reviewer Michelle Levy opined that modest changes would not make financial advice widely available, hinting that her report is quite detailed and demands comprehensive reform.

Ms Levy handed down her report to the government in mid-December, triggering a countdown to Minister for Financial Services Stephen Jones’ response.

But it appears that there may not be too many quick wins for the minister, with Ms Levy admitting on Tuesday that her report is very thorough and that contrary to what she had been told, “hard” recommendations were necessary.

“I learnt that no one is happy with the current regime applying to providers of financial advice,” she said.

“Many people told me that what was needed was modest changes to the law, really things around the edges. They suggested things like reducing the steps that are in the safe harbour, or perhaps removing it, but leaving the best interest duty. They suggested reducing some of the content requirements for statements of advice, removing annual consent requirements from government fee arrangements, and expanding the list of matters that could be addressed with intra-fund advice or expanding special exemptions,” Ms Levy explained.

“But none of these changes would make good financial advice available, in my view, to a large number of people. And some, I worried, would badly affect the quality of advice,” she opined.

Ms Levy also admitted that some of the people she consulted with were quite sceptical of the overall value of financial advice, while others believed more advice should be provided by government agencies.

“While the feedback on the problems in the current regime was consistent, the suggestions on how they could be fixed weren’t. For example, on the one hand, we were told that safe harbour was an impediment to being an adviser and then other people told us it was imperative that it stay,” the QAR reviewer said.

“But my role wasn’t to be a mediator and it wasn’t to try to come up with a compromise between the different views of different stakeholders, my role was to recommend changes which would improve the accessibility and affordability and the quality of advice,” she stated.

As such, Ms Levy noted, her recommendations “do not” reflect the synthesis of suggestions made by stakeholders.

“They reflect my assessment of what I think should be changed,” she said.

Ms Levy refused to comment on whether Mr Jones had reached out to her since she handed over her report, but it is believed that the report is due to see the light of day shortly. Namely, on 19 January, a spokesperson for the minister told ifa that while the report would not be published in January, its publication date was only a couple of weeks away.