Now is ‘absolutely’ time for QAR response: FAAA says post-budget

With the Labor government’s budget now out of the way, the Financial Advice Association Australia (FAAA) believes that now is the time for the government to publicise its response to the QAR.

Speaking on a post-budget webinar on Wednesday, FAAA interim general manager policy and advocacy, Phil Anderson, said the time would “absolutely” be right for an imminent announcement regarding the QAR.

“I think that the minister [Stephen Jones] has signalled that he will make an announcement with respect to the Quality of Advice Review after the budget has been released. So, I guess it’s true that the minister has been very focused on the budget as one of the ministers in the Treasury portfolio, now hopefully after he has finished with selling the budget, he has a little bit more time to devote to moving forward and making announcements on exactly what he proposes to do with the QAR,” Mr Anderson said in response to a question posed by ifa.

“We’re going to be very helpful with supporting moving forward with that rapidly,” he added.

The FAAA had previously identified a set of “quick wins” from the QAR, which they believed could be implemented promptly and have a significant impact.

“We’ve focused on things that will be beneficial to financial advisers and their clients, but we do recognise that this review will also need to address how you make advice more accessible to those who can’t afford to work with an adviser,” Mr Anderson explained.

“Important priorities” the FAAA has flagged include removing the obligation to do FDS’ and rationalising fee consent, removing the obligation to provide statements of advice, and the rationalisation of the best interest duty safe harbour steps.

“They are three of the big things, there are other important proposals that we have supported, but if we could get those three up and going, it would be a great outcome.”

The FAAA is also keen to see more clarity soon from the government on the impact of the Australian Securities and Investments Commission (ASIC) levy on the financial advice sector.

Namely, the ASIC levy was not touched on in the budget.

As ifa previously reported, the 2022–23 financial year is expected to see a big increase in ASIC fees paid by financial advisers following the expiration of a two-year freeze implemented by the previous government.

Speaking on the matter on Wednesday, the FAAA’s senior manager government relations and policy, George John, said the group would be advocating for clarity on this matter with Mr Jones’ office.

Mr Anderson explained that since the current year was not subject to the freeze, costs would be higher, particularly due to the reduced number of advisers.

“We expect that we would get a release from ASIC over the next couple of months, what’s called a Cost Recovery Impact Statement, and that will set out in detail what the position is for the 2022–23 year. We are very conscious that the message from ASIC is that the costs aren’t going down,” Mr Anderson said.

“We can certainly expect that there is going to be a significant increase.”

Also touching on the levy in a statement issued by the FAAA on budget night, CEO Sarah Abood said: “The costs for advice businesses continue to rise and it is a high priority to minimise the impact of the levy being unfrozen from the current financial year”.

“A great way to make financial advice more affordable for consumers is to reduce the business costs involved in the provision of advice — and this is one important way the government can assist.”