Joint associations urge more immediate action on QAR

Mike Taylor

Managing Editor and Publisher

24 April 2023

The key financial planning and accounting groups making up the Joint Associations Working Group have renewed their calls for a more immediate response from the Government to the Quality of Advice Review (QAR) final recommendations.

The Joint Associations Working Group (JAWG) has acknowledged the fact the Government has sent the QAR final report off for further consultation but is arguing that there are things that can be implemented “in the immediate short term”.

It has written to the Assistant Treasurer and Minister for Financial Services, Stephen Jones itemising those items as being:

1. Reforms to documentary requirements

• Recommendation 8 – Repeal Fee Disclosure Statements and introduce a ‘standard fee consent form’
• Recommendation 9 – Reform the requirement to provide a statement of advice in its current form
• Recommendation 10 – Financial Services Guides that can be accessed via a business’s website, or which continue to be provided in the current form
• Recommendation 11 – Require a client to provide written consent to being treated as a wholesale client

2. Best Interests Duty

• Recommendation 5 – Replace the existing best interests duty and related obligations (the duty to give appropriate advice, the duty to warn the client and the duty of priority) with a new statutory best interests duty that is a true fiduciary duty and does not include a safe harbour

3. Design and Distribution Reporting Obligations
   • Recommendation 12.1 – Amend the reporting obligations for relevant providers
4. Deduction of fees and client directed payments

• Recommendation 7 – Adoption of clearer member directed charging requirements for the provision of personal advice by Superannuation Funds

5. Conflicted remuneration

• Recommendations 13.1-13.9 – Tighten some of the exemptions on the ban on conflicted remuneration

These short-term reforms have the collective potential to reduce the cost of advice, making advice more scalable and more accessible.

JAWG believes that recommendations that will require a longer timeframe to implement include:

1. Definitions

• Recommendation 1 – Revise the definition of Personal Advice
  • Recommendation 2 – General Advice warning
  • Recommendation 3 – Amend the definition of Relevant Provider

Amendments to the Code of Ethics to remove any inconsistencies with the new best interests duty.

1. Good Advice
   • Recommendation 4 – Introduction of the Good Advice Duty
2. Design and Distribution Obligation

The JAWG includes, amongst others, the Financial Advice Association of Australia, CPA Australia, CA-ANZ, the Boutique Financial Planning Principles Association, the Institution of Public Accountants and the Licensee Leadership Forum.