Simplicity and flexibility are foreign concepts in financial services yet they are the hallmarks of Treasury’s Quality of Advice Review interim proposals.

Advisers have become so used to regulatory complexity, many are baulking at proposals designed to make their life easier.

This is evident reading some submissions to the advice review proposals paper.

Their hesitance to fully embrace Michelle Levy’s proposals has been the most interesting of reactions. The staunch objection of consumer groups and enthusiastic support of product issuers has been largely expected but it seems advisers are perplexed by Treasury’s shift to more principles-based regulation, despite fighting for it.

Most intriguing is their reluctance to completely abandon Statements of Advice and replace Best Interests Duty with the simple requirement to provide “good advice”.

Their concerns are legitimate.

Giving product issuers the green light to provide personal advice with very few controls is a scary thought.

There are concerns the divide between relevant providers (financial advisers) and non-relevant providers (customer service representatives) is too wide.

Even the Financial Services Council is calling for customer service representatives to hold minimum education and training standards, preferably a subset of the qualifications required of professional advisers.

But the chasm between relevant and non-relevant providers is not a dangerous consumer hazard. It’s more like a flashing sign that will make it easier for consumers to distinguish objective, holistic advice from the restricted, conflicted type.

The bigger the gap the better, as seen in the UK’s regulatory model where there are independent advisers and restricted advisers, with clearly defined roles and labels.

This delineation supports consumers to understand what they are getting and what they’re not.

It also supports professional financial advisers to articulate their value proposition and points of differentiation.

There should be no middle ground.