Don’t hold off on quick wins from QAR, AFA and FPA tell government

Financial Planning Association of Australia (FPA) chief executive officer Sarah Abood and Association of Financial Advisers (AFA) national president Sam Perera have called on the government to act swiftly on some of the potential “quick wins” from the Quality of Advice Review (QAR).

Speaking at AIA Australia’s Adviser Summit on Tuesday, Ms Abood said that members would have liked to see several recommendations implemented “yesterday”.

“We are going down the path of looking at the things that we think are noncontroversial that could potentially be done with the stroke of a pen and trying to carve them out and say, ‘look, can we just get on with this?’,” she said.

“We’re fully conscious of the danger that phase one of any project never gets to phase two. We want to make sure that the totality of the proposals are reviewed and looked at, but we don’t want those, if you like, quick wins held by things that might take longer to solve.”

Since taking over as CEO last January, Ms Abood said that some of the biggest issues that members have raised with her are advice fee consent and the “utter appalling nature” of having to deal with the processes of different product providers.

“Some of them take wet signatures, some of them don’t. The different ways that super funds might use to verify that advice was in accordance with the sole purpose test and aligned to the member’s interest in the fund,” she explained.

“All the costs of complying with that are currently sitting with advisers. Well, June’s coming up, it’s not that far away, so certainly members who talk to me, they’d like it yesterday.”

In contrast, Ms Abood said that the issue of relevant providers and what advice can be cross subsidised within an intrafund-style advice model are generating a lot more debate and concern.

“Those are things that I think will take us longer to solve, but we do have to solve them. It is important that we get more good advice to Australian consumers,” she said.

Mr Perera said that he was hoping that the associations would reach an agreement with key stakeholders within the next few weeks on three issues that can then be taken to Minister for Financial Services Stephen Jones.

“I think we should be close. Sarah has got some meetings in the coming week and a half with some important stakeholders who have not wanted to play ball so far, but certainly the Joint Associations would agree on the top three I would think. The big super funds last week, or a week and a half ago, they’ve come on board and given their principal agreement,” he said.

“So if we can get this other one important stakeholder online, we will be in a position hopefully to go to the minister and say, ‘hey, for these three things, these are all the stakeholders that agree to it, what is stopping you? Can you implement these as quickly as possible?’”

Ms Abood suggested that the “time pressure is on” when it comes to QAR, particularly in relation to the issue of non-relevant providers.

“To find the areas of agreement so we can take it, to be able to say to the minister, to be able to say to the shadow, the treasurer, that this is where our profession is agreed. If you do this, we’re going to be reasonably happy,” she said.

“That doesn’t mean every single person’s going to agree with every single element of it, but here’s what we can live with, and the more people who agree with us, the more chance we have of getting it over the line.”

As previously noted by the associations following their recent merger vote, Mr Perera reiterated that advocacy would be the main focus of the combined entity to be known as the Financial Advice Association of Australia.

“The profession’s been strangled because of the red tape that we’ve been subject to, certainly for well over a decade, and with Michelle Levy’s final recommendations and the proposals we’ve had, we’ve got the best opportunity in front of us to arrest the decline of the profession in relation to that red tape,” he said.

“We aspire to be the strongest legitimate voice on behalf of the profession and our members to prosecute the swift implementation of the Levy recommendations and that will be our priority moving forward.”

Mr Perera noted that the associations had a “huge fight” in front of them in ensuring that the recommendations of the review are implemented as swiftly as possible.

“That’s going to require a strong counterpunch and I believe the united voice aiming to represent close to 80 per cent of the members of the FAR will be able to deliver that,” he said.

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.