QAR legislation skewed by views of Treasury bureaucrats

Despite a series of roundtable discussions around the shape of the legislation underpinning the Quality of Advice Review (QAR) first tranche legislation, the Government had preferred the voices of Treasury bureaucrats over those of advisers.

The Association of Independently Owned Financial Advisers (AIOFP) executive director, Peter Johnston told members that the voices of practicing financial advisers had not been heard with respect to the QAR first tranche.

“We have only had a series of ‘YES MINISTER’ moments where Bureaucrats, who have zero experience with our industry, have forced their views onto consumers and small business,” he said.

Overall, he said that the AIOFP considered the proposed legislation as relatively small step in the right direction but noted that “it not does address or consider the significant practical issues raised by the advice industry that would reduce the cost of advice for consumers.

“We also note that not one submission from the Advice community has been published for general consumption or made available to Politicians for consideration. We find this disturbing to say the least. It is yet again another example of Canberra Bureaucrats imposing their polarised views on how consumers should be treated, how business should operate and not listening to stakeholders that operate at the coal face of the industry with the best interests of consumers foremost in their mind.”

“Despite some welcome ‘cosmetic’ changes the legislation does not address the core problem affecting consumers – the cost of advice. In fact, it actually increases the cost of delivering advice which ultimately consumers are paying for where Advisers have no choice but to pass it on.”

“Politicians and their army of well – paid Bureaucrats have failed yet again to grasp that their actions have made the provision of quality professional advice even more inaccessible to consumers.”

“The proposed legislation reform is a missed opportunity to reduce the costly compliance burdens on Advice practices to the detriment of consumers. The proposed Single Consent Forms are not universally accepted by all product manufacturers. The proposed legislation now provides for additional compliance obligations for Advisers with new civil penalties. Furthermore, the Fee Consent Form regime now extends to the already beleaguered Risk Insurance specialist.”

“This proposed legislative reforms does nothing to achieve the objectives of QAR which was to address the inaccessibility and unaffordability of professional advice.”

The FAAA, while generally welcoming the first tranche QAR legislation, echoed the sentiments of the Financial Services Council around super fund trustees processing financial advice fees.

FAAA chief executive, Sarah Abood said the legislation placed specific obligations on the trsutees before advice fees can be paid and there was not clarity as to how the obligations could be met.

“The risk we see is that this could cause significant extra work for financial advisers who may be asked to provide additional specific documentation, such as Statements of Advice and invoices. This will also require onerous processing by trustees,” she said.