Julia Newbould (left), Michelle Levy, Sarah Abood and Matt Lawler

Quality of Advice Review lead Michelle Levy believes there are enough regulatory safeguards in place for her “good advice” regime to work and to discourage any potential return of conflicted advice models.

Speaking on a webinar hosted by Professional Planner in partnership with AMP, Levy said design and distribution obligations, anti-hawking measures, the education standard and the Code of Ethics offer consumers sufficient protections.

Additionally, when it comes to qualitatively meeting the safe harbour steps in her ideal regime, Levy does not believe anything needed to be standardised.

“The point of my proposal is to look at the content of advice and then it is up to the provider of the advice or the licensee to decide what is it that [they] need to do to be reasonably satisfied this is good advice,” Levy said.

She added it would not necessarily be different to the approach to the safe harbour steps currently.

“The best interests duty in the Corporations Act would be repealed, but there would still be a best interest duty under the Code of Ethics.”

Levy believes the regulatory transition could be “less difficult” than most regulatory reform but gave no timeframe for the changes, noting it was up to financial minister Stephen Jones.

“The more people that support this and are happy with the proposals will be lobbying the minister,” Levy said. “He says he’s keen to do something. The crafting of these proposals could be quite simple and lend themselves to a simple transition period.”

How good and best sit together

Throughout what was a constructive and collaborative discussion, AMP Advice managing director Matt Lawler recognised the hard work put in by Levy and the team to listen and get broad feedback from the industry. Lawler indicated his support for the intent of Levy’s wider proposals and many of the recommendations put forward.

Lawler noted the subjectivity of “best and good” which may not quell the anxiety advisers might have about falling foul of the regulators.

“It’s going to come down to whoever is looking at that file in judgement – ASIC or AFCA – what framework are they using to decide whether it is best or good.”

Levy said BID in the Code of Ethics and the Corporations Act are about process, whereas good advice is principles-based, noting she wanted to regulate the advice outcome rather than process.