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Future Fit Advice
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Why the QAR response feels like a win

Amara's avatar
Amara
Icon for Iress Contributor rankIress Contributor
5 months ago

A tiered approach still needs best practice to sit on top of it all.

Earlier today, I was able to represent Iress in Canberra and attend an announcement at Parliament House, where Minister Stephen Jones released the Government’s final response to the Quality of Advice Review. 

I’ve been involved in the Review in one way or another over the past few years, and learned that the political process always requires patience. The thing you believe in may not be the same as what other people believe in, and the best policy comes from the combination of good ideas and good execution – not that different to how product development works. Or most things in business life, really. 

The policy version, though, has a unique set of constituents to balance.

After spending a big chunk of my career focused on retirement policy and being involved in retirement products, it was only a matter of time before I came back to advice and advice policy. The QAR has taken many turns, but at heart it was always about improving the accessibility and affordability of advice – by getting advisers back to being able to do their jobs, with less red tape, less drama and less compliance intervention.

For me, all of the ideas worth following in investment and super led me back to advice, which in turn led me to Iress – and, more specifically, to Xplan, where I am now chief product and operations officer for Iress Wealth.

So, almost two years later, today feels like a win – for consumers and the people that genuinely care about their financial wellbeing. 

I know many advisers may be concerned by the idea that under these reforms, others get to give advice, too. But I really want to reiterate that that’s not what I’m hearing – not from speaking to the policy makers today, and not from hearing the Minister’s speech. Professional advice given by financial advisers will always reign supreme. 

And while the expansion of advice into new channels may have gotten all the headlines, I’m particularly heartened by the announcement that statements of advice will be replaced in favour of principles-based advice records. We know just how much time SOA generation adds to the advice process, and how little value the end document often delivers for the end consumer. My team is eagerly awaiting the full legislation to be ready to make the necessary changes within Xplan and support you to benefit from the efficiency gains this will deliver.

Today’s announcement gives us a path, and there is so much more work to do to make advice easier to provide to more Australians. Making advice efficient is central to that. And I’m really glad that the Government agrees.

Updated 5 months ago
Version 2.0

8 Comments

  • Yesterday was a big day for our profession, and I was also at the briefing in Canberra.  The confirmation of the removal of the BID safe harbour and rationalisation of advice documents was good news, although the detail is still relatively limited.  The big news from yesterday was further information on the plans to introduce a new category of financial adviser.  This isn't new, as Michelle Levy first proposed it in August last year.  The issue has always been about carefully limiting this advice to types of advice that are simple and ensuring that the education standard that applies is adequately high; much higher than RG146. What was news yesterday was that the Government would make these changes applicable to super funds, life insurers and banks at the same time (previously they were starting with super funds), and the reference to this term "Qualified Adviser".  That has rightly received a lot of pushback.  They are clearly not going to be anywhere near as qualified as fully qualified advisers.  We can't have Qualified Advisers and Professional Advisers, or Partially Qualified Advisers and Fully Qualified Advisers.  This needs to make sense to clients and ultimately be very clear on what the difference is.  Another term needs to be found.

    • Amara's avatar
      Amara
      Icon for Iress Contributor rankIress Contributor

      I did see you there up front Phil! And yes. I thought Aleks's questioning on definitions and labelling and "hairdressers" definitely hit the mark! Hopefully regardless of what we call it (and I hope it improves), the real guardrails are made clear.

  • peterworn's avatar
    peterworn
    Icon for Advisely Partner rankAdvisely Partner

    After reading a lot of very emotional responses yesterday, it was great to see this thoughtful perspective. Amara. I hope the changes will also provide a pathway for new advisers to start with institutions and then transition to be the IFAs of the future. Remember that issue we have around succession?

    • Amara's avatar
      Amara
      Icon for Iress Contributor rankIress Contributor

      Thanks Pete- that's exactly what I thinking- its a great entry point rather than a competitive one.

  • Amara, good piece and yes there is a lot of emotion around these changes. 

    The devil ultimately will be in the detail of these reforms and how well they are thought through.  Starting and ending with the client and increasing access and affordability are good intentions.

    Lets make sure that the end customers that benefit from increased access understand what they are getting or not getting when they go through each of the channels. Having the same reference to adviser will be problematic. 

    Like peterworn  I am all for building capacity and a pathway for future financial advisers.

     

    • Amara's avatar
      Amara
      Icon for Iress Contributor rankIress Contributor

      Thanks Darren! Something they will hopefully think through more. Lots more water still to go under the bridge.

  • As you say Amara the announcements weren't entirely surprising and have been flagged for some time. Others have noted that it could take some time to implement. As a practicing and qualified financial planner (in the real sense of the word), the issue I find concerning is the title of Qualified Adviser. I believe it will lead to confusion and misunderstanding and potentially deliberate exploitation of this confusion. If the employees of funds/banks providing this advice were called something like Employed Fund/Bank Adviser for example that would potentially help. Having said that, I wouldn't want all the attention focussed on the label and other important elements of the QAR response ignored.

  • DebKent's avatar
    DebKent
    Icon for Advisely Board rankAdvisely Board

    thanks for your post, Amara as everyone has pointed out this was always going to be the case for these institutions to get back into advice, the main concern as Phil-Anderson has said is the name of this new class of adviser and also the level of education they will need to do, professional standards legislation stated that education must be higher than the minimum which would have been the old RG146 which is mainly defunct.  I am sure we will know more once there is more clarity

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