Levy goes from QAR independent chair to vocal activist
The chair of the Quality of Advice Review (QAR), Michelle Levy, has gone further than any of the major financial planning associations in demanding that the Government not sit on its hands in implementing key elements of her final report.
Levy, in an interview and an opinion piece published in the Australian Financial Review, broke new ground for a Government-appointed independent chair by becoming a vocal advocate prepared to fight for her own recommendations. Conventionally, independent chairs of such inquiries accept their healthy Government retainers, present their reports, publicly justify their recommendations and move on.
It will come as no surprise that, with the exception of the Association of Independently Owned Financial Professionals (AIOFP), Australia’s financial planning and advice organisations have politely applauded the motives for Levy’s activism without actually criticising the Government.
Financial Advice Association of Australia chief executive, Sarah Abood said that while her organisation was supportive of many of the things Levy saying it, and the other associations making up the Joint Associations Working Group, had adopted a more nuanced approach as outlined in the JAWG’s letter to the Assistant Treasurer and Minister for Financial Services, Stephen Jones.
That letter acknowledged the likelihood that all of the QAR recommendations could not be implemented at one time and argued for a stage approach to “ensure immediate gains can be made, including substantially reducing the cost of accessing financial advice”.
The JAWG then outlined the QAR recommendations it believed could be implemented in the short to medium term including reduced documentation, the replacement of the existing best interests duty, amendment to the design and distribution (DDO) reporting obligations, deduction of super advice fees and conflicted remuneration.
Abood said that there was the expectation of Government action on at least some of those issues after next week’s Federal Budget.
Stockbrokers and Investments Advisers Association (SIAA) chief executive, Judith Fox said Levy’s approach was understandable given the considerable the level of consultation which had taken place and her understanding of the law.
As well, Fox said that she believed “misconceptions about the final recommendations of the QAR abound”.
Levy just doesn’t get it. Most of her QAR recommendations were excellent, but her recommendations which would allow product companies to give conflicted, poor quality, personal advice were a mistake. Everyone knows they would lead to bad outcomes for consumers. Everyone knows they are unnecessary, as product companies have plenty of scope to support their clients through good quality factual information without providing advice.
The only groups in favour of this bad element of QAR are the product companies, and adviser associations who are heavily influenced by those product companies. Most advisers are firmly opposed to the recommendations relating to product company advice, and are disgusted their associations have (yet again) sided with product company interests.
Levy needs to admit her mistake and back away, so that the excellent majority of her QAR can be implemented without delay or controversy. Unfortunately her obstinance in relation to the minority of QAR recommendations that were clearly a mistake, is undermining all her good work and trashing her reputation and potential legacy.
It is clear the only thing Labor is interested in is conflicted, vertical integration so called “advice” for their union buddies running the union funds. They are not, and never have, been interested in supporting independent advisers helping Australians get unconflicted advice.
To be fair Levy’s mandate wasn’t to fix 15 years of regulatory over reach and excessive regulation, nor to pull down an uppity regulator in ASIC who has lost the plot, it was to make advice accessible to more Australians.
In essence this is classic bureaucracy, one arm of government tying a section of society in complete regulatory Gordian knot and massive increase in compliance costs, whilst another arm of government spends lots of money asking why things aren’t working properly.
We all need to grow up and realise we are being regulated by a band of public servant idiots and have expectations to match this reality.
Perfectly said. Bravo!
Jones should do something, the quick wins the FAAA asked for don’t conflict with the AIOFP or consumer advocates. Why is he so adverse to helping make advice more affordable or available or helping the profession in any way? Non relevant providers and good advice should be tabled later and ideally shelved
Simple, see Wildcat comment above
Levy had a segment on ABC radio this morning where after arguing her point that banks can be trusted with her watered down ‘good advice’ proposition, that she is and quote in her own words, “not a supporter of the banks”.
I call this an Oxymoron, falsely true.
I will ignore anything JAWG has to offer on QAR. Sitting on that group is the FSC, the architects of LIF and whose members directly funded the FASEA Fiasco for the first four years. And I am yet to be convinced the new organization for advisers has divested themselves from ANY funding from product manufacturers
The FAAAAAAAAAAAAAAAAAAAAAAA roadshow invitation has about 20 sponsors and an entry for advisers to be told how good they are and sell this product. I will not be going.
Why did the FAAA throw in their lot with the JAWG even before consulting members ? Clearly some of those proposal in QAR will wipe out advisers.
Because FAAA is heavily influenced by the product companies that dominate JAWG.
Levy is growing desperate for quick implementation as more financial planners wake up to the fact they were conned. Dealer groups and PI insurers are telling advisers SOA’s will remain regardless of whether Levy’s recommendations are adopted or not. That leaves us with the scrapping of TMD declarations and quicker consent process. These are welcome improvements, but it just takes us back to where we were 2 years ago and does little to counter the massive free kick the big institutions would receive, who will compete with us on a very unlevel playing field.
The problem with the main adviser associations, especially the FPA is that they have never stood up to the government; they are more interested in having nice morning teas with them.
It is incredible that the FPA are still ignorant to the fact that the only way to get the government to do something is to speak loudly with as much publicity. The government are not your friends; represent your members and hold them to account publicly.
The bigger problem with the FPA (and now FAAA) is they have no credibility when talking to government. They talk and talk about “professionalism”, but at the same time maintain the unprofessional grandfathered CFP scam, and accept payments from product companies. The FAAA will never be taken seriously by government until they get their own house in order and start acting like a professional association.
Michelle Michelle Michelle ….it takes time for Union Super funds to sign off on Legislation.. It’s like paying an insurance payout or a death benefit in an Industry Super fund simply months. Once Stephen gets permission it will come…. Michelle Levy and the QAR reminds me of Adolf Hitler pre-election speeches. He had some good proposals also…reduce unemployment by building new roads, a new Car for the people (VW) and factories…what a guy & fantastic ideas,… just some small details about Jews which you shouldn’t worry about. In that QAR, those small details about Union Super Funds providing advice you shouldn’t really worry about either. Oh, and all the good proposals well she’s already come out and said in reality things like fee consent forms and SOA removal, they won’t get legs. So what are you going to be left with ?