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QAR legislation skewed by views of Treasury bureaucrats

Mike Taylor2 April 2024
Blah Blah Blah

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.  

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Des Nutmeg
10 days ago

Is the picture above, illustrating “BLAH BLAH BLAH”, Financial Newswire’s response to another grumpy rant from the AIOFP?

Comms for No Service
10 days ago
Reply to  Des Nutmeg

Thanks Industry Super troll:

  • Industry Super charge EVERY MEMBER ADVICE COMMISSIONS
  • Industry Super ADVICE COMMISSIONS are NON DISCLOSED & NOT MEMBER APPROVED
  • Industry Super receive more HIDDEN COMMISSIONS FROM LIFE INS Co.’s
  • Industry Super COMMISSIONS are MOSTLY FOR NO SERVICE TO 90% OF MEMBERS
  • Industry Super Unlisted Assets ONLY EVER GO UP IN VALUE ?????
  • Industry Super want to expand on ALL the above via their paid pollie JONSEY.

YEP BLAH, BLAH, BLAH freaking BLAH

Has Shoes
10 days ago

Sounds just like a Madoff ponzi scheme whose valuations never went down until they went bust! 🙂

Here here!
10 days ago
Reply to  Des Nutmeg

Well said @Des!

Frank
10 days ago

In my opinion, another day with another example of Labor and Canberra treating advisers very poorly.

Appalling.

Nuffyland
10 days ago

It was inevitable that treasury and ASIC would eventually distort the reforms so QAR would end up adding more red tape rather than reducing it. This is what they do, every time.

More Red Tape AGAIN
10 days ago

Jonsey is a LIAR !!!
More Red Tape on Advisers
More Costs to Clients
QAR 1 = MASSIVE FAIL

QAR - the great hoax
10 days ago

You seem surprised?

Real Advisers Screwed Again
10 days ago

Not surprised at all.
Have been saying Real Advisers would get screwed again in QAR for years now.

Old Risky
10 days ago

Some of us have seen this movie before. It’s a rerun of the early 2000’s, post Wallis. Good ideas get sent off to Treasury, and occasionally are also interfered with by the lawyers that live in the cave known as ASIC, who have a long-standing ideological hatred of advisers, and in particular life risk commissions, and then it all good ideas turn to %^&*!!. it’s the age-old story of the horse, camel, and a committee.

Treasury have always played the pollies, of either side, on a break, because the politicians just don’t know enough about the subject matter and are not capable of absorbing a brief larger than one page. But it gets really interesting when the Treasury ideas happen to match those of the financial services minister and a treasurer, who are pro-bank – that’s how we got LIF, and don’t forget the banks funded FASEA with the first three years, to the tune of $11 million. Then again we now have the situation of the Labor Party’s biggest political donators having every day access to our current financial services minister

All of this policy angst is designed to eliminate self-employed, independent thinking, advisers. The bureaucrats reckon we’ll eventually price ourselves out of business, leaving a big vacuum for the banks (with Robo advice) to step back into advice, and carry out a little more rape and pillage as per past history. And of course, Labors friends over in the industry funds will absolutely love having less advice competition, thus preserving FUM by selling pensions, and doling out free backpacker advice for the masses.

The facts are we the advice industry are not taken seriously because, as old school “consultative” (read too nice) representative organisations, we don’t have a permanent lobbying function in the corridors of Parliament House. That’s with the old ISA did 2013 – 2022, with David Whiteley haunting the corridors of Parliament House. It worked a treat, because he annoyed the hell out of Coalition politicians, just by always being there. And since Labor was elected, the industry superfunds now have a new representative body provisionally called “NewCo” as reported by the AFR on 11 September 2023

The independent advice industry needs to fund a full-time professional lobbyist, preferably with connections to the business end of the Labor political spectrum i.e. those with economics degrees and business experience, not those with connections to the ISA. And yes there are some, we just have to find them and be in their ear, every day, and every way!

Until then, I’ve got a sharp stick I can sell you

bemused
10 days ago

I reckon Treasury thinks Financial Planners are just like Cock Roaches. They keep trying to kill them but they never disappear. However, it’s time Advocacy groups come out and issue a statement saying No confidence in the Minister and they no longer support QAR, because this cockroach is on life support.

The current Labor Minister has certainly got the Pest Exterminators working over time. We know Peter supports him given his guest speaker appearance. But Geez, Every month a new nail in the coffin. The ATO is removing GST credits on Advice Fees, Treasury removing ability to charge fees via Super, ASIC introducing registration requirements, additional reporting obligations commenced, and several Levies waived in 2023/2024 to commence and last week the CLR.