Levy clarifies role of call centre operators in providing advice

Speaking at the Stockbrokers Conference in Sydney on Wednesday, the lead of the Quality of Advice Review (QAR) Michelle Levy elaborated on her recommendation to enable product issuers, such as banks, superannuation funds, and insurance firms, to give advice.

When asked to clarify the distinction between advice provided by relevant providers such as financial advisers and advice offered by non-relevant providers, Ms Levy stressed that it would not be the call centre staff providing the advice.

“It’s not going to be call centre operators and that was very much in my mind that advice will be given digitally,” the QAR lead clarified.

“So again, the whole conversation about relevant providers is almost going to be sidelined.”

In previous speaking engagements, the QAR lead has clarified technology and digital advice tools can be used to support people who are not financial advisers to provide personal advice.

“Digital advice tools can also be made available directly to consumers. Some already are and improvements in technology mean that they are increasingly able to provide more sophisticated personal advice,” she said earlier.

On Wednesday, Ms Levy explained even under current law, if advice is given digitally or by an institution, advice doesn’t have to be given by a relevant provider. Additionally, she pointed out that currently, such advice is categorised as general advice despite sometimes venturing beyond that boundary.

“My recommendations are very much with that in mind. And even when you do have the individual, the call centre staff member, again, they’re going to have some sort of digital program in front of them to help them. So, it’s really an artificial question to then say ‘Who is giving me advice?’ Is it the individual? And the law at the moment is very unclear.

“What I am saying, and this is your bright line … if they are not paying a fee for the advice, then asking who is providing the advice will no longer matter.”

In her recommendations, Ms Levy said vertical integration is a “part of the answer” to the problem her review was trying to solve — the problem of too few Australians having access to financial advice.

“Financial information, guidance, and advice should be available throughout our lives, and it should respond to our needs and even anticipate them,” Ms Levy said.

“In my view, this means there should be a variety of providers. Not all advice can be provided by financial advisers, and nor should it be. The 16,000 financial advisers are required to hold relevant degrees and to comply with professional standards. They are entitled to charge a fair fee for their advice.”

Ms Levy’s recommendation is for vertically integrated product and personal advice providers to be bound by a duty to provide “good advice”, rather than the existing best interests duty.

Expounding on the distinction between general and personal advice, and how good advice applies, Ms Levy clarified general advice, at its extreme, relates to advertisements and recommendations appearing on websites. Regarding newsletters, she explained that their placement would be determined by the structure of the actual newsletter.

“The way to do a newsletter as general advice is ‘Dear Michelle, here’s my newsletter’. Not ‘Dear Michelle, I think you blah blah blah’, that’s personal advice,” Ms Levy said.

“What I’m saying is more things will be personal advice. And then I say, if you’re uncertain, assume you’re giving personal advice. Now, then you’re in the world of good advice.

“So, what you’re doing is you’re asking the question? What is it that makes my advice good, fit for purpose? So, if I’m writing a newsletter but I want to make it more personal … I want to actually say ‘Dear Michelle, we have been thinking about blah blah blah’… Think about the way you write that, how you write that. What is the advice that you’re giving?”

No conflict with government

Ms Levy also touched on her relationship with the government and denied the presence of conflict.

“There’s no conflict … I don’t know really what the attitude is. You know, I’ve given my report, it’s up to the government to respond and they haven’t,” she said.

In a video message also played at the Stockbrokers Conference a day earlier, Minister for Financial Services Stephen Jones said he would have more to say about the government’s response to the review “very soon”.

He explained that, just like he did with experience pathway, he is “determined” to work with the industry and regulators to “get it right” and “make a meaningful difference”.