QAR changes: 3 things you should do right now

As a software provider to financial advice practices, we see this firsthand. In recent times, we’ve made system changes to accommodate new FDS obligations, the introduction of new design and distribution obligations, an overhaul of income protection insurance, plus a raft of other changes too numerous to mention.

We are about to enter yet another phase of regulatory change – the Quality of Advice Review (QAR). So how should practice leaders prepare now?

Tip 1: Focus on your business

With so much hype, it’s easy to get caught up in the noise. But it’s better to not get too distracted.

There is still a long way to go. Draft legislation hasn’t yet been prepared and will still need to pass through both houses of Parliament. You can expect there to be intense debate, media scrutiny, and keen interest from consumer groups.

We can speculate on what the outcome will be. But in the meantime, you still have clients to service and a business to run.

The challenges you have now – whether you’re struggling with advice efficiency, client engagement or staff, will remain largely the same, whether QAR is enacted and whatever form it takes. I think that’s the one thing that is a certainty!

Tip 2: Follow best practice

The government is now proposing to replace the statement of advice with a “fit-for-purpose” advice record.

As one planner noted: “The idea that you would move away from written advice entirely seemed a stretch too far.”

As advisers, we welcome a move to more flexible reporting. A “substance-over-form” approach would open new possibilities, including concise reporting, engaging graphic-rich content and a greater focus on client goals, strategies and outcomes.

But the reality is – whether we call it an “SOA”, an “advice record” or something else, the underlying advice process is unlikely to materially change.

The need to have an efficient and holistic advice offering, supported by the right software and systems, will be just as important.

Tip 3: Work on your value proposition

At our most recent Practice Leader’s Forum in Perth, we discussed the importance of having a clearly articulated value proposition.

We’ve always known that. But perhaps it’s now more important than ever. If, as proposed, “big super” is allowed to provide advice more easily, then fee-for-service advisers will need a point of difference. And to communicate it!

It’s a great opportunity to go back to the drawing board, understand the value you add, and build your messaging around it.

Vincent Holland is a co-founder of Plutosoft, a comprehensive financial planning software system.