Home / Industry / Levy details ‘frustration’ with consumer groups opposing advice review proposals

The infamous open letter penned by advice review leader Michelle Levy wasn't so much a slight on the government, she explained, but an expression of her consternation with CHOICE. "I think there's a very profound misunderstanding," she said.

The opposition of consumer groups CHOICE and Super Consumers Australia to the Quality of Advice Review proposals put forward by Michelle Levy comes from a misunderstanding of the law and the very nature of those recommendations, the review lead believes.

“I don’t mean to be arrogant,” she told an audience at the Stockbrokers and Investment Advisers Association (SIAA) annual conference in Sydney Wednesday. “But you’re all specialists. I’m a specialist.”

Levy was struggling to explain, without sounding like an elitist, why the consumer groups’ collective ructions are not, as she said in an infamous open letter penned in May, “based on facts”.

The review requires assessment by those with a specialist view, she explained, adding that she was concerned by the “lack of detail” in the arguments put forward by the consumer groups.

“I think there’s a very profound misunderstanding,” Levy said. “A lot of the concern and criticism coming from the consumer groups around [abandoning] best interest study assumes all the advice is given by the [old] 20th century model of a financial adviser in an office talking about a comprehensive financial plan. Well, that’s not we’re talking about.”

In its submission to the review, CHOICE said Levy’s proposal to encourage banks and super funds to re-enter the industry and provide ‘good advice’, instead of advice that ticked the safe harbour boxes within the confines of best interests duty, would “weaken core consumer protections and fuel the provision of poor quality advice by vertically integrated institutions”.

The scare campaign, which included a warning that the proposals would lead to a repeat of the wrongdoing uncovered in the Hayne royal commission, had its desired effect. Financial Services minister Stephen Jones refused to accept the proposals, instead calling for a further consultation and only this week confirming the government will respond some time in June.

Asked whether there was discord between Levy and the government over the review, she said the open letter she penned was more of a comment on the views expressed by consumer groups than the minister.

“There’s no conflict… I’ve given my report and it’s up to the government to respond, and they haven’t,” she said. “[The open letter] is really frustration with CHOICE and not anything else.”

Asked what she would say to those imploring the government to either do nothing with the review proposals or only tinker around the edges, Levy made it clear that this would be a bad outcome for consumers and do little to give more people access to affordable, quality advice.

“What I said in the [open letter], I said because it’s not good for consumers.”