Jones delivers top-line response – devil will be in detail
The Government has revealed its high-level response to the Quality of Advice Review (QAR) final recommendations but everyone involved knows that the devil will be in the legislative and regulatory detail delivered via the Treasury.
And what is being said publicly and privately in the wake of the Government’s initial response are two different things.
The public response from virtually all the major players has been broadly positive while the private response has been to express concern that many of the safeguards which evolved out of the Future of Financial Advice changes and the Royal Commission may be undermined.
Importantly, a number of superannuation fund senior executives are just as worried about the undermining of advice standards as those sitting inside financial advice licensees.
The broad public response of stakeholders was reflected in that of the Financial Advice Association of Australia which welcomed the minister’s announcement which welcomed the easy wins around cutting red tape but urged “sensible consideration” of the next steps.
Similarly, the Council of Australian Life Insurers (CALI) welcomed the elements retaining commission-based remuneration around life insurance but urged greater flexibility around the provision of general advice by life insurers.
The SMSF Association chief executive, Peter Burgess also welcomed the sensible changes to red tape while Australia’s two largest industry superannuation funds, AustralianSuper and the Australian Retirement Trust (ART) also welcomed the changes but reserve judgement on what a “fit-for-purpose” advice record would look like and how collective charging would work.
Vanguard Australia welcomed the removal of what it described as some of the key efficiency barriers to adviser practices and expanding the ability of super funds to provide advice.
However, it said Vanguard believed even more progress could be made beyond this to ensure Australians received affordable advice suited to them in the future.
The Financial Services Council chief executive, Blake Briggs said the Government had been right to concentrate on lowering the cost of providing financial advice and improving consumers’ experience before moving on to the more complex areas.
Surely an advice profession doesn’t rely on government alone for safeguards. If you are worried about watered down advice documents or disclosure, then put your own standards in! Where we need to get to, is telling consumers what they need to know for an informed choice but not hiding behind mountains of confusing paperwork.
im an IFA. I can tell you my advice ‘records’ and client recommendation reports will still be 20 odd pages, but they will be entirely about the client with the necessary information they need to know about the pros and risks of my advice,
Collective charging is a feature of all commercial enterprises. The most profitable customers subsidise the least profitable. It’s the fundamental premise of insurance. Can’t understand why everyone is so challenged by the thought.
The reason people have an issue with collective charging (or as it was previously known grandfathered commission) is the union funds argued black and blue commissions are bad, and the government banded it. Now the union funds, and all other super fund are going to directly benefit from charging a commission to their members. Remember we had a royal commission that focused on fee for no service? What do you think collective charging is?