The Financial Planning Association of Australia (FPA) welcomes the release of the terms of reference for the Quality of Advice Review and the appointment of Ms Michelle Levy as the reviewer responsible for undertaking the Review.
Sarah Abood, CEO of the FPA, says the FPA is looking forward to working with Ms Levy who is a highly regarded expert in financial services law.
“We regard the review as a significant opportunity to set out our members’ vision for the future of the financial planning profession,” says Ms Abood.
“The past 21 years have seen unprecedented regulatory change in the financial planning profession. These include the introduction of the financial services reforms, measures to address and support consumers through the global financial crisis, the introduction and modifications of the Future of Financial Advice (FOFA) reforms, the professionalism and education standard frameworks introduction, the life insurance framework and, more recently, the implementation of the Royal Commission recommendations.
“However, the Government and regulators have rarely taken the opportunity to assess the success or failure of these multiple layers of measures to address the issues of professionalisation, quality of advice and the accessibility and affordability of advice to consumers. The result has been considerable regulatory duplication and inefficiency.
“The FPA welcomes the Quality of Advice Review as the perfect opportunity to measure and assess the impact of all this regulatory change on the profession, and address the unintended consequences created such as the tick a box, rules-based, compliance-heavy advice process that financial planners are currently required to comply with. It will also set a framework enabling financial planners to provide affordable, engaging, scalable and professional advice.“
In its submission to Treasury on the Terms of Reference for the review (Quality of Advice Review – draft Terms of Reference), the FPA emphasised the importance of evaluating the effectiveness of the vast regulatory, legislative and other changes that have been implemented since the introduction of the Financial Services Reforms in the late 1990s through to the recent finalisation of the Hayne Royal Commission recommendations, and whether they have had the intended effect.
“The final terms of reference are sensible and closely align to the FPA’s vision for the review. In particular, this includes how the regulatory framework could better enable high quality, accessible and affordable financial advice for consumers and remove unnecessary complexity.
“We look forward to being actively involved in this review. We will include our members who can demonstrate the current issues in professional advice delivery, and work closely with Ms Levy and her team on outcomes that ensure the sustainability of the profession and the affordability of quality financial advice for Australians.
“It is critical to have the view of all stakeholders in the profession included in the review, in particular financial planners and their clients who can provide real world, practical examples of how the current regulatory environment and requirements adversely impact the client experience,” says Ms Abood.