Accountants, advisers plead for ‘urgent action’ on advice deregulation

The previous government expanded the Quality of Advice Review’s terms of reference to include a focus on access and affordability. And Labor assistant treasurer Stephen Jones has described financial advice regulations as a “hot mess”, pledging to help ease the burden before last year’s election.

But Mr. Jones told the last week Financial Review the government would be looking for “easy and obvious wins” on financial advice, indicating it was open to cutting some red tape but would not embrace the shake-up of consumer protection laws proposed by Ms Levy.

The joint bodies referenced the line in their letter. “The reforms must extend beyond easy wins such as streamlining fee disclosure requirements and iron-out obligations like the design and distribution obligations,” they wrote. “Australian consumers will be left behind without the adoption of a
holistic package of reforms.”

The government’s response will fail unless it leads to new models of advice emerging that allow consumers to get the help they need “how they want it and when they want it, including via digital means,” they wrote.

It called for the introduction of legislation to Parliament this year that “removes regulatory and disclosure requirements not benefiting consumers” and “reduces the time and cost to prepare quality financial advice”.

The letter hit out at “some stakeholders” who it claimed “continue to argue for the status quo without offering real solutions”. The line is understood to be a veiled reference to consumer advocacy groups such as Choice and Super Consumers Australia, who vehemently opposed Ms Levy’s draft proposals, especially its suggestion to “make it easier” for banks and super funds to provide advice by exempting them from Labor’s landmark duty to act in the best interests of clients, introduced in 2012.

Speaking at an event in Sydney on Tuesday, Ms Levy said her year-long review had led her to the conclusion that the status quo was dangerous in blocking workers and retirees from accessing much-needed advice.

“I do think that there will be some changes,” she said. “The worst thing that could happen is nothing happens. That [would be] really bad.”