The federal government has released the terms of reference for its Quality of Advice Review and named the individual chosen to head up the review.
Superannuation, Financial Services and the Digital Economy Minister Jane Hume said the review will investigate whether there are opportunities to streamline and simplify regulatory compliance to reduce costs and duplication, how to improve the clarity and availability of documents provided to consumers and whether parts of the regulatory framework have created unintended consequences.
Under the terms of reference, the review will examine how financial advice has been interpreted and used by consumers, safe harbour provisions for the best interest duty, financial advice documentation including statements of advice, fee disclosure requirements and the remaining exemption to the ban on conflicted remuneration in regards to life insurance commissions.
Hume also announced the review would be led by Michelle Levy, a partner with legal firm Allens who specialises in financial services, life insurance and superannuation law.
The SMSF Association welcomed Levy’s appointment, with chief executive John Maroney noting her expert knowledge and experience could rectify measures poorly executed by the government.
“A specialist in superannuation, life insurance, distribution and financial services law, Levy will bring the necessary expertise and experience to this critical issue of over-regulation that is confronting the financial advice industry,” Maroney said.
“Aside from her legal work, her roles as a member and former chair of the Law Council of Australia’s superannuation committee and a member of the ATO’s Superannuation Industry Stewardship Group make her ideally suited to this position.”
Financial Planning Association of Australia (FPA) chief executive Sarah Abood also applauded the appointment of Levy and noted the regulatory duplication and inefficiency created by the government could be resolved in the review.
“The past 21 years have seen unprecedented regulatory change in the financial planning profession. These include the introduction of the financial services reforms, measures to address and support consumers through the global financial crisis, the introduction and modifications of the Future of Financial Advice reforms, the professionalism and education standard frameworks introduction, the life insurance framework and, more recently, the implementation of the royal commission recommendations,” Abood said.
“The FPA welcomes the Quality of Advice Review as the perfect opportunity to measure and assess the impact of all this regulatory change on the profession, and address the unintended consequences created, such as the tick-a-box, rules-based, compliance-heavy advice process that financial planners are currently required to comply with. It will also set a framework enabling financial planners to provide affordable, engaging, scalable and professional advice.”
The review will invite submissions from the public and consult with stakeholders, including consumers, industry and regulators, with the report set to be provided to the government by 16 December.
