AMA: I'm Phil Anderson, GM Policy, Advocacy & Standards at FAAA, Ask Me Anything!

Thanks Mat. Yes, whilst getting rid of FDSs will be a big outcome for some advisers (those who have not moved to 12 month fixed term agreements), the bigger gains are likely to be through Tranche 2 of the DBFO. There wasn’t much in Tranche 1 for risk advisers, other than the new client consent requirement and confirmation of the retention of commissions (although at the current levels). We see the rationalisation of the Best Interests Duty, removal of the safe harbour and the rationalisation of advice documents as the most important reforms.

There is still a long way to go in this process. I suspect that there is still some work (consultation) that needs to be done before the draft legislation is released and then there is still a period of time between that point and the tabling of the legislation in the Parliament. We remain in regular contact with Treasury and the Minister’s office.

In the Minister’s media release in response to the passing of DBFO Tranche 1 he said “The second tranche of reforms will further increase access and affordability of financial advice and will be developed over the second half of the year”. We obviously want it to happen as soon as possible, and with an election expected in the first half of 2025, we would like it to be fully resolved before the election. Unfortunately, there are no guarantees with this.

I am not particularly concerned by a change of Government, as the Opposition have said that they will fully implement the Michelle Levy QAR recommendations, so they will still drive change. The issue might be that there is a delay for them to transition into the driving seat. Thus, given the election is still as much as 9 months away, and a change of Government is not likely to deliver a significantly different outcome, we will simply focus on driving for change and working with whomever is in Government.

Thanks Fosca. The big win, although this is limited to those advisers who are on ongoing fee arrangements (which excludes those who have switched to 12 month fixed term agreements), is the removal of FDSs. I would suggest that those who are on 12 month fixed term agreements have reason to go back to ongoing fee arrangements to leverage the benefit of 150 days after the anniversary for clients to renew. They would no longer be bound by a requirement to get clients to renew before they get to the 12 month point. Another important win was the ability to move anniversary dates. I also think that we now have the chance to rationalise the fee consent process, via the development of a standard mandatory form. Ideally this will, before too long, become a digital process, where clients can approve an ongoing fee arrangement via clicking a button on an App on their phone.

There is merit in the ability to provide FSG information on websites, however I expect that licensees will be reasonably careful with the implementation of this.

There was nothing much of great interest in the Conflicted Remuneration changes and the client consent requirement for risk advisers, is really just locking into law something that is already a business practice. This is a once off consent and does not need to be provided to the life insurer.

The FAAA has supported the idea of a new class of advisers from the outset of consultation on this, however subject to some very important pre-conditions. We certainly do not support the ‘qualified adviser’ term, which the Minister has previously committed to us will change. Otherwise, we want to ensure that the scope of QAs is limited to simple advice and the education standard is much higher. We are also looking for a level playing field between QAs and fully qualified advisers, which is important. That would need to address whether financial advice practices are allowed to appoint them and charge for the services that they provide.

This is a very important issue, which we will be closely tracking. We will not provide our support to this proposal until we are certain that our concerns have been addressed.

Hi Phil, what are you views with regards to Records of Advice (ROAs) going forward. If the SOAs are going to be reduced down to a much smaller document, will ROAs go completely or will they still exist? They are another document that takes up time and adds little (no) value to the Adviser / Client relationship.

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