AFA News 10 February 2022. On Friday 4 February 2022, the AFA provided a submission to Treasury on the consultation on the Draft Terms of Reference for the Quality of Advice Review (QAR).
The Government announced this review back in April 2021, and it is a key response to recommendations in the Banking Royal Commission final report. Hayne called for a review to assess the impact of all the recent reforms on the quality of advice. The Quality of Advice is important; however, it is evident that the Government is equally concerned about the implications for access and affordability of financial advice. The review will also look at the LIF reforms and consider the retention of the other remaining exemptions from the conflicted remuneration provisions.
We welcomed the draft Terms of Reference, which we think does a good job of defining the areas that should be considered as part of this review. We have also suggested that the Terms of Reference could include the following additional areas:
- Listening to the voice of existing clients.
- A thorough process re-engineering exercise to remove non-value-adding steps in the advice process and to improve inefficient steps.
- Consideration of centralised systems and standardised processes and forms.
- Actions to address regulatory uncertainty.
- Aligning the scale of compliance obligations to the level of client risk.
- Promotion of new entrants into the advice profession.
- Consideration of the rationale for Individual licensing.
In terms of the process, we have called for discussion papers along the way, release and consultation on an interim report and the identification and timely action on potential quick wins.
The QAR exercise will be an important opportunity to address the fundamental weaknesses in the financial advice ecosystem and to identify long term workable solutions. This will be a high priority for the AFA during the course of 2022.
Please click here for a copy of the Draft Terms of Reference for the QAR.
Please click here for a copy of the AFA Submission on the Draft Terms of Reference for the QAR.
For any questions or suggestions on the QAR, please email policy@afa.asn.au.
Issued 10.02.2022. AFA Policy & Education Update
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