During the course of this week, the Assistant Treasurer and Minister for Financial Services, Stephen Jones, has appeared at a series of events in Sydney, Brisbane and Melbourne which have been run by Conexus Financial, where he has spoken about his plans with the QAR. Whilst he has made it clear that he sees the need for reform, he has also signalled that a formal response will not be issued until after the 9 May 2023 Federal Budget. He has also recognised that some of the recommendations are more obvious and straight forward, whilst others may still take more careful and extended consultation.
We understand the rationale for this thinking and have proposed a quick wins package that could contain the following:
- Rationalise the Best Interests Duty and remove the safe harbour steps.
- Remove the obligation to do FDSs and rationalise fee consent.
- Remove the mandatory requirement to provide advice documentation unless the client requests it prior to or at the time the advice is provided.
- Enable the FSGs for financial advisers to be placed on their website.
- Remove the DDO reporting obligations for relevant providers other than for complaints.
Despite their immediately negative response to the release of the QAR final report in early February, on Thursday 9 March 2023, a group of consumer groups came out in support of the recommendation to remove the mandatory requirement to provide an advice document (subject to some modification) and to rationalise the Best Interests Duty and to repeal the safe harbour steps. They remain strongly opposed to the provision of personal advice by non-relevant providers. In our view this statement is a positive development, and lends support to the pursuit of a quick wins package.
On Wednesday 8 March 2023, we held a webinar for AFA members to explain the QAR recommendations and to set out our thinking behind the challenging elements and our proposals for a quick wins package. Please watch this webinar or view the presentation for more background on the QAR and the AFA’s advocacy position.
We need to be conscious that achieving fundamental legislative reform is typically a drawn out process, and these reforms might take some time before they are implemented. This reinforces the importance of strong and ongoing advocacy in support of sensible reforms.
We welcome feedback from members on the QAR by email to email@example.com.