QAR draft legislation expected this calendar year

Speaking on an ifa webcast about the government’s response to the Quality of Advice Review (QAR), the chief executive of the Financial Advice Association Australia (FAAA), Sarah Abood, said there is optimism that the government will hasten the process of legislating the “quick wins”.

“We’re very, very pleased with what we’re hearing from the minister and from Treasury on [the stream one recommendations]. These are really important for our members … I’d add that standardisation of fee consent is in this round and I think that’s also very important,” Ms Abood said.

“These are going to have a real impact on reducing the cost of advice and we’re really keen to see these done in a hurry. They are being treated as urgent very genuinely from what I’ve seen.

“We’ve had the first consultation with Treasury … that was on the 29th of June and that was a good half-day of really deep discussion on the issues and how these tranche one reforms could be delivered.”

When Financial Services Minister Stephen Jones revealed the government would accept 14 of the 22 recommendations made by QAR lead Michelle Levy, he announced that the legislative response would be divided into three streams.

Under stream one, Mr Jones said the government intends to scrap fee disclosure statements, while replacing statements of advice (SOAs) with “fit-for-purpose” advice records.

Also under this initial stream, the government plans to eliminate the safe harbour steps from the best interests duty, consolidate the ongoing fee renewal and consent requirements into a single form, and introduce standardised consumer consent requirements to classify a consumer as a wholesale or sophisticated client.

“The first stream of work will streamline the process of giving advice through current channels,” Mr Jones said at the time.

Citing “weaknesses in the current regulatory framework”, the minister said, “with each superfluous rule, the cost of providing advice has increased”.

Ms Abood said the FAAA is conscious that the clock is ticking, adding that “everything that we’ve heard both from Treasury and the minister is recognising the urgency of these changes”.

“[Mr Jones] has said many times in answers to questions he sees these as urgent. He doesn’t want to see urgent changes held up by things that might take a little bit longer to solve,” she said.

“We are hoping we will see draft legislation and at least something ready to go to parliament in this calendar year. Whether it will get all the way through the process or not, I’m not sure.

“But the commitment is there and we’re doing everything we can to progress those.”