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QAR handbrake needs to release

Mike Taylor17 April 2024
Colonial First State CFS Edge Wealth Management platform

The Government may be ham-stringing the delivery of the Quality of Advice Review recommendations because it has paused the expansion of the Consumer Data Right (CDR) framework to superannuation funds and insurers.

In an assessment of the structures needing to be in place for the delivery of digital advice, data and technology service firm, Novigi, said gathering the data reqired to deliver advice still posed a significant challenge.

“In the QAR, Michelle Levy declined to make a recommendation on access to consumer data. She cited the proposed expansion of CDR to include ‘Open Finance’ as the solution to current difficulties in collecting client information for the delivery of advice,” it said.

“Since then, the expansion of CDR to superannuation and insurance has been paused, with Treasury not due to review this decision until the end of 2024. Other valuable data is held by government agencies like the ATO and Services Australia, and no current plans exist to make this easier for advisers and advice tools to access this data.”

“Though this problem has not yet been solved in practice, we believe that the solutions are known. Some form of public utility, developed in partnership between government and industry, could make it possible for client data to be accessed for the provision of advice. Such a utility would ideally serve two purposes:

  1. Allow an individual client to share their data with an adviser or advice tool. CDR provides a good model of how client consent and data sharing can work here.
  2. Allow advice providers and software developers to access large, anonymised datasets which could be used to support decision making in the advice process.

“The solution here may indeed be an expansion of CDR, but the loss of momentum and lack of a plan to incorporate ATO and Services Australia data into the CDR regime is cause for concern here. Advice providers and their partners may need to explore other avenues,” the Novigi assessment said.

It said that financial advice creates the richest and most complete datasets that financial institutions are likely to hold on their clients.

“Despite this, we have found that neither advice providers nor organisations like super funds know what to do with this data. The problem potentially lies in the relatively small number of clients that this data is available for — a superannuation fund might have millions of members, but advice records for mere tens of thousands of them.”

“Nonetheless, we feel this comprehensive sample of data must have applications in problems that require cohort analysis. Retirement income strategy, marketing, and member engagement are just a few that come to mind.”

“With the regulatory handbrake taken off financial advice, we expect the number of advised Australians to grow rapidly in coming years. As well as improving our overall financial wellbeing, we anticipate that this will lead to a host of new opportunities for advice providers throughout the industry.”

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Classic useless Canberra
20 days ago

How about starting with giving Real Advisers access to ATO TBC & TSB.
Only moronic or internationally difficult Govt Bureaucracies could design an info system that allows Tax Agents access to data that most can’t advise on. And no access to the same data that Financial Advisers need to advise on.
Typical difficult, moronic Canberra.
Or the more we see it is intentionally trying to Kill Real Advisers.