An independent financial advisory dealer group and a fund manager have added to the industry voices expressing their support for the Quality of Advice Review (QAR) recommendations.
Lifespan chief executive Eugene Ardino lauded QAR head Michelle Levy’s preparedness to challenge some of the existing hurdles in the current framework to enable more Australians to access the financial advice they require.
“To make advice more accessible and affordable our compliance framework needs to be simpler. To achieve this there needs to be some radical changes – not just tinkering around the edges – and her proposals do just that,” Ardino acknowledged.
“The question is, will those changes have the desired affect and what undesirable unintended consequences may they produce?” he asked.
However, he recognised the recommendation that will allow employees of banks, superannuation funds and product providers needs to approached with caution.
“The risk and possible downside is that there will be scope for unqualified people to give personal advice. We’ll need to work through as to what standards and restrictions would apply to those who are not Relevant Providers and are able to provide personal advice under QAR recommendations,” he warned.
Like Lifespan global funds management house abrdn welcomed the proposed changes to the financial advisory environment outlined by the QAR. In particular the manager welcomed the shift from a prescriptive best interests duty to a good advice duty mean a bigger and more significant role for digitally delivered advice.
“If the proposed QAR recommendations are introduced it will streamline and accelerate the introduction of digital advice in Australia and play a major role in reducing the advice gap and lead to better informed financial decisions for many more Australians,” abrdn executive adviser Jason Nyilas said.
He pointed out abrdn has harboured concerns digital advice solutions may not be able to satisfy the best interests duty and as such has curtailed its development of a “bionic” investment advice service with Hub24.
Ardino suggested the sector must approach the coming round of consultation regarding the QAR with an open mind to be able to improve the flaws in the current regulation framework.
“The advice industry needs to really get its head around what is recommended, which is fundamental changes to cornerstone regulations. The industry needs to look at these from different and new angles with an open mind and while it may need time to do this it should be attended to as a priority,” he said.
Last week the Joint Associations Working Group welcomed the recommendations made in the final QAR report.