Quality of advice review – Proposal paper
AIOFP SUBMISSION – September 2022
The Association of Independently Owned Financial Professionals (AIOFP) welcomes the opportunity to respond to the ‘Proposals for Reform’ in the Quality of Advice Review (QAR) consultation paper.
It is significant to the AIOFP that Ms Levy recognizes and affirms positively that changes should be made to the regulatory framework to improve the accessibility and affordability of financial advice, as to the purpose of the Review. Furthermore, the AIOFP supports the clarity of vision of Ms Levy in observing that ‘the current regulatory framework is a significant impediment to consumers accessing financial advice’.
The AIOFP represents non-institutionally owned or aligned members with around 6000 financial advisers actively working to provide quality advice to consumers. The QAR has eventuated in response to the failure of policy by a coalition government more concerned about its own electoral prospects and less with the right of all Australians to be able to access high quality, affordable, financial advice. To that extent, AIOFP supports the objectives of the Future of Advice (FOFA) reforms which sought to benefit consumers by policies which aimed to improve the trust and confidence of Australian retail investors in the financial services and ensure the availability, accessibility and affordability of high – quality financial advice.
In submitting this paper, AIOFP will respond to those core matters which it believes affects its members and their ability to provide accessible and affordable advice to consumers. Consumers and their best interests have been at the centre of legislative reforms in a number of respects. The QAR proposals seek to amend those reforms. Some are consistent with the position of the AIOFP, others are not. It is suggested that a symbiotic relationship exists between the professional financial adviser and the consumer. The regulatory environment and compliance burdens, together with inappropriate political intervention by the previous government, have conspired to confuse the ecosystem in which that trusted relationship operates.
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Proposal 1 – Regulation of personal advice
Proposal 2 – General advice
Proposal 3 – Obligation to provide good advice
Proposal 4 – Requirement to be a relevant provider
Proposal 5 – Personal advice to superannuation fund members
Proposal 6 – Collective charging of advice fees
Proposal 7 – Fees for advice provided to members about their superannuation
Proposal 8 – Ongoing fee arrangements and consent requirements
Proposal 9 – Statement of advice
Proposal 10 – Financial services guide
Proposal 11 – Design and distribution obligations reporting requirements
Proposal 12 – Transition arrangements