Even with a lightened agenda, the government failed to finish its homework and instead delivered only a portion of the first tranche of advice reforms. It’s a poor return, and at this rate the advice review could be a ten-year project.
If super funds can’t implement the retirement income covenant’s mandate to provide retirement guidance, the review lead pointed out, how are they going to handle the responsibility of saving financial advice?
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 16,000 advisers providing full-service, holistic advice aren’t the ones who can plug the advice gap, Mota explained. Levy’s plan, however, has the potential to facilitate a “quantum shift” in the industry.
The advice review lead had said she wouldn’t comment on the recommendations while the government pondered its response. But with the consultation dragging on, she urged the government to get it done and let ASIC do the refinement.
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.
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.
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 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.
Concern about Michelle Levy’s insurance advice consent proposal is off the mark and shouldn’t get in the way of reform, the association’s chief executive says.
Transaction has become a dirty word in financial services yet trust and strong professional relationships can be built on regular transactions over time, according to Bell Direct CEO Arnie Selvarajah.
Life insurance advisers should retain commissions at their current level, the advice review leader proposed, but only on the condition that clients sign explicit consent agreements acknowledging conflicted remuneration.
The global ETF and would-be superannuation fund provider believes a scaled compliance model would better serve the domestic advice market.
