Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Levy’s advice proposals get heavy hitting advocacy lift
Quality of Advice Review lead Michelle Levy’s plan to deregulate the industry and bring advice to a greater swathe of Australians has received a swell of support from the Financial Services Council and its members.
Support for the proposals comes against a minority outcry from consumer groups that the proposals will open the door to the kind of consumer harm uncovered in the 2018 Hayne Royal Commission.
On Wednesday, Australian Unity executive general manager Matt Brown (pictured) published an impassioned thought piece on LinkedIn calling on the financial services minister to implement Levy’s suite of reforms. After invoking inspiration from both country singer Dolly Parton and former APRA executive John Trowbridge, Brown said it was “critical” the government takes action as quickly as possible once the final proposals were handed down on December 16 “and does not sit on the proposed reforms”.
“As we look to 2023, now is the time for Minister Jones to listen to the combined and largely united voices of our industry, implement recommendations of Levy’s Quality of Advice Review in a timely manner, and prioritise the introduction of reforms that enable advice to reach more Australians more affordably,” Brown said.
Brown referenced data released by the Financial Services Council (FSC) this week, which leveraged research from NMG Consulting to show that two million Australians would be better off if Levy’s plan to deregulate advice and allow banks and super funds to become ‘relevant providers’ in a 2-tier advice system is implemented.
The other key reform plank, to abandon the necessary provision of Statements of Advice to clients, would also reduce costs and allow advisers to service more of the community according to the FSC.
Australian Unity is far from the only member of the FSC to back Levy’s plan, with heavy-hitters like AMP and Insignia – the two largest advice providers in the country – both providing relatively unconditional support for the package at the Australian Financial Review’s recent wealth and banking summit.
The timely wave of support for the proposals is up against concern expressed by consumer groups such as CHOICE and Super Consumers Australia that opening up advice to less qualified providers will reduce the quality of advice being provided and open up the public to financial harm.
Rather than opening up the industry to large corporate entities, CHOICE wants all conflicts in advice banned and consideration given to “the role of government, independent organisations and new business models”. The group has encouraged the government to look at the United Kingdom’s Money and Pensions Service as a possible model for reform.
