Professional calls for ‘deeper scrutiny’ of QAR proposals

Lifespan CEO Eugene Ardino has welcomed key aspects of Michelle Levy’s Quality of Advice Review (QAR) recommendations but has urged caution, suggesting that “deeper scrutiny” of proposed changes is needed.

Mr Ardino assessed that while recommendations purporting to ease regulatory complexity and remove duplications are positives, the idea of unqualified people providing advice is cause for caution.

“Under the QAR recommendations, anyone, including employees of banks, super funds and product providers who currently provides general advice to existing clients, would be deemed to be providing personal advice and so would be subject to a higher standard having to satisfy a ‘good advice’ test and show that the advice was fit for purpose and relevant to the client’s needs.

“However, the risk and possible downside is that there will be scope for unqualified people to give personal advice,” Mr Ardino said.

As such, he encouraged more work to be done towards determining what standards and restrictions would apply to those who are not relevant providers but are able to provide personal advice under QAR recommendations.

Speaking to ifa earlier, Mr Ardino referred to this particular recommendation as “the one area that I think that really needs to be looked at”.

“I don’t have the exact answer as to what will work there, but I just think there need to be some fairly clear limitations as to what non-relevant providers can and can’t advise on if we’re going to go down that path,” he said at the time.

Ultimately, Mr Ardino expects to see a great deal of lobbying from all stakeholder sectors as the government “grapples with the proposals and tries to work out what, how and when to implement”.

“The advice industry needs to really get its head around what is recommended, which is fundamental changes to cornerstone regulations,” he said.

“The industry needs to look at these from different and new angles with an open mind and while it may need time to do this it should be attended to as a priority.”

Mr Ardino was also in agreeance that to achieve a more accessible and affordable industry, “there needs to be some radical changes” and “not just tinkering around the edges”.

“Her [Michelle Levy’s] proposals do just that,” he concluded.

Last week, it emerged that Financial Services Minister, Stephen Jones, intends to engage additional “expert analysis” with the intention to “stress-test” the final QAR report before bringing any recommendations to Parliament.