Regulation

Michelle Levy said she was ‘puzzled’ by the government’s decision to conduct a consultation on the proposals handed down in the advice review, while industry leaders urged for the adoption of her reform suite.

The regulator’s financial reporting surveillance program has turned up numerous companies failing to make required risk disclosures in financial reports, as it reminds directors of their obligation to provide investors with key information about a company’s prospects.

In Levy’s new world, conflicts and vertical integration are likely to be accommodated by a new statutory best interests duty with a broader scope and a lower, more flexible bar in an effort to bring advice to the masses.

Levy made no major deviations in her final suite of proposals, with Treasury left to mull on a blueprint for reform that should usher in a less prescriptive, two-tiered advice regime. But there are a few tweaks that might raise eyebrows.

“I don’t think anyone told me that things are going well,” said Michelle Levy of the advice review consultation process. Despite being given disparate views on how to fix things, the lawyer believes compromise was never an option.

In a letter released by the group Thursday it said “urgent action is needed”, and called the government’s impending response a “rare opportunity to deliver affordable and accessible advice to consumers”.

The green shoots that emerged for adviser numbers in the back half of 2022 were no fluke, with provisional advisers leading an industry resurgence after five years of decline.

The corporate regulator reports it has issued 21 stop orders against companies over marketing of financial products since new design and distribution obligations went into effect last October, with the rate of enforcement picking up in recent months.

The Financial Services Council and its provider members are putting their weight behind the advice review leader’s suite of reforms as the December 16 delivery date looms.

Review leader Michelle Levy said the proposals need to look at the “full universe” of providers. If ‘good advice’ is to replace best interests duty while also opening the gates to product providers, the duties involved will need to fully match the breadth of that task.

The long-running project has been shelved after a devastating Accenture report cited multiple areas of concern. ASIC chair Joe Longo said the ASX “failed to demonstrate appropriate control”.

A new report has identified “blanket de-banking” of certain sectors, and reminded the banks that commerciality must be balanced with corporate social responsibility.