Conrad Travers (left), Stephen Jones and Matt Lawler

The main criticism of the Quality of Advice Review proposals is the potential for the big banks to return to advice due to a simpler regulator regime, but financial services minister Stephen Jones is confident the banks won’t return to advice.

At an event co-hosted by Professional Planner in partnership with BT, Jones was asked what he thought about the possibility of the big banks returning to advice – “I’d be surprised” was his response.

“We need to improve and enhance and increase the availability of financial advice in this country [but] there are inherent conflicts in product manufacturers providing advice,” Jones said.

It’s worth noting that ultimately whatever recommendations get chosen comes down to the discretion of Jones.

The final advice review proposal paper was due on 16 December which Jones described would be part of his “Christmas reading” list. The minster added there wouldn’t be an immediate response, but a measured one in the first quarter of the year.

The review is only part of the journey

The Quality of Advice Review was first announced as part of the recommendations from the Hayne Royal Commission to be held three years after the final report of the commission with a due date at the end of 2022.

Recommendation 2.3 of the final commission report suggested a review of measures into the quality of advice.

Recommendation 2.5 suggested a review of the life insurance commissions, suggesting that unless there is a justification for retaining commissions it should be eliminated.

Hayne’s report stipulated the review should ideally be completed by the end of financial year 2022, but no later than the end of the 2022 calendar year.

Jane Hume announced in 2021 that the Life Insurance Framework review would be included in the Quality of Advice Review. Three years in the making, it was anticipated everything in the world of professional financial advice would be included in its jurisdiction.

However, when the Terms of Reference were released in March (along with Levy’s appointment), it showed a refined remit that excluded education, the definition of wholesale and retail clients, and the Code of Ethics, amongst other items.

Wrapping up

AMP’s Matt Lawler proposed pairing up younger advisers to younger clients to give limited advice. This would help build the experience of the former while reducing the advice gap of the latter, he argued.