Levy concerned Jones may sideline banks

Speaking to ifa on Monday, the lead of the Quality of Advice Review (QAR) Michelle Levy said she feels “somewhat optimistic” having heard the Financial Services Minister’s initial interpretation of her final report. 

As previously reported, Financial Services Minister Stephen Jones has opted to engage with advisers by attending various Conexus Financial events, which require advisers to pay at least $170 per seat, rather than communicating through his press team.

According to ifa’s sources, during the most recent breakfast engagement held in Sydney on Monday, Mr Jones informed attendees that he would not take any recommendations to cabinet before the May budget, and hinted instead that the likely reforms would be known by the end of the year.

Commenting on what the Minister had to say, Ms Levy told ifa that she was particularly encouraged by his acknowledgement of the need people have for financial advice and that need couldn’t be met by 16,000 financial advisers.

“He also spoke about the fact that [there] are very many overlapping obligations which are preventing people getting good advice. These comments made me feel that he understands the need for the recommendations,” she said.

Ms Levy proposed banks and superannuation funds be allowed to provide simple financial advice to bridge the advice gap. This, however, has been met with heavy criticism by many independent financial advisers.

And while the Minister did acknowledge on Monday that he is seriously considering allowing entities other than relevant providers — professional advisers currently registered as such — to provide advice, Ms Levy said she was disappointed by what was implied.

“I am worried he may introduce them for super funds and not also banks and insurers,” the QAR lead said. 

“This I think is because super funds have a duty to act in the best interests of members. I do not think there should be different treatment across them.”

Touching on likely delays in the implementation of her recommendations, Ms Levy warned of the cost. 

“The longer we wait for law reform, the more people miss out on financial advice that would assist them. There is a cost to the delay,” she said.

ifa has reached out to Minister Jones’ team for comment on Monday but has yet to receive a response.