Government Responds to Review on Quality of Financial Advice

The Financial Services Council has welcomed the Government's response to the Quality of Advice Review and its commitment to remove costly red tape imposed on financial advisers this year.

The Government announced the Delivering Better Financial Outcomes package adopting the bulk of the recommendations made in Michelle Levy's Quality of Advice Review (the Review) to be developed over the second half of 2023 and early 2024 and broken down into three streams of consultation.

Stream one: Financial Advice

• Abolishing the safe harbour steps for meeting the Best Interests Duty.
• Replace the Statement of Advice with a financial advice record.
• Simplifying fee consent and renewal requirements.
• More flexible requirements around the displaying of Financial Services Guides (FSGs).
• Standardising consents for determining wholesale and sophisticated investors.
• Tightening the ban on conflicted remuneration and consent requirements for commission in life insurance.

Stream two: Superannuation funds

• Implementation of Recommendation 6 of the Review to remove restrictions on superannuation funds to provide retirement advice and information to their members.
• This consultation will also consider changes to the definitions of personal advice, general advice, relevant providers and the introduction of a Good Advice Duty as proposed by the Review in Recommendations 1-4.

Stream three: New models

• Consult on the expansion of a Good Advice Duty to non-relevant providers not including banks that would also consider an expanded definition of personal advice.
• Removal of the general advice warning.
• Amendments to the design and distribution obligations.
• Finalise implementation for Stream 1 proposals to abolish the statement of advice and removal of the safe harbour steps.

FSC response