The Financial Services Council (FSC) has today called for the implementation of the Quality of Advice Review proposals paper and flagged additional changes to ensure the cost of providing advice is reduced.
In its submission on the Review's Proposals Paper, the FSC welcomes the Proposals Paper as a sensible roadmap for affordable financial advice that allows consumers to access advice on topics they need, through a provider that suits them.
CEO of the FSC Blake Briggs said: "The policy challenge now is to achieve a regulatory framework that not simply stops bad advice but offers every incentive to deliver good advice for individual consumers.
"Unnecessary red tape has pushed the cost of providing advice to more than $5,000, meaning fewer consumers are able to access advice, leaving a generation of Australians - many who are approaching retirement, unadvised and at risk of poor financial decisions."
With recommendations on advice reforms due by the end of this year, the FSC calls for this final report to include proposals such as:
- Co-design of the reforms with industry and implemented in full, as soon as possible and with a 12-month lead-in time.
- The new principles-based framework should enable level of regulatory oversight to industry, or an independent body equipped with the technical expertise to administer that framework.
- The proposed redefinition definition of personal advice, reforms to documentation (e.g. abolition of the Statement of Advice) and introduction of a Good Advice Duty and the amendment of the Code of Ethics, subject to practical refinements that freeing up advice providers to determine how they present advice to consumer that is more bespoke to their individual needs and circumstances.
"Failure to fix the regulatory framework will have severe consequences for the financial decisions and empowerment of millions of Australians which is why the Government should commit to implementing these reforms to make advice affordable and accessible.
"Financial Services Minister Stephen Jones has made it clear to the financial advice industry he understands there is an urgent need to reform financial advice rules, with 2,600 advisers leaving the profession in the last year alone. The proposals paper and our additional recommendations deliver a blueprint for him to address that."
