The coalition of advice associations and interest groups has called on financial services minister Stephen Jones to act urgently to fix the advice industry with his response to the Quality of Advice due within weeks.
The comments were disclosed in an open letter to the minister from the Joint Association Working Group, which includes (among others) the FPA, AFA, FSC, SMSF Association, and the Licensee Leaders Forum led by Fortnum Private Wealth group CEO Neil Younger.
Advice review lead Michelle Levy released her interim proposals for accessibility and affordability of advice, and the Life Insurance Framework review, late last year. The final proposals are yet to be revealed although Levy said there would not be major changes.
“The government’s response to the Quality of Advice Review has the potential to fundamentally improve financial advice in the interest of consumers by ensuring many millions more Australians can access advice for decades to come,” the letter said.
“Compulsory superannuation has significant benefits. However, if advice policy settings are left unchanged only a third of retirees will get financial advice over the next decade.”
The letter noted the number of Australians who now receive financial advice has fallen by around half, the number of advisers has dropped significantly and the cost of financial advice has risen.
“Urgent action is needed, the government has a rare opportunity to deliver affordable and accessible advice to consumers as an outcome of its response to the Quality of Advice Review,” the letter said.
“Some stakeholders continue to argue for the status quo without offering real solutions for the many Australians who retire each year without financial advice. Any response to the Quality of Advice Review must increase access to quality financial advice, while maintaining appropriate consumer protections that are proven to work in the interests of consumers.”
The letter said the Government’s response to the review will only succeed if consumers can get scaled advice, supports the profession by increasing the number of advisers, and reducing regulatory red tape.
“We believe that many of the final recommendations of the Quality of Advice Review are aimed at achieving these objectives. But Australian consumers will be left behind without the adoption of a holistic package of reforms,” the letter said.
“The reforms must extend beyond easy wins such as streamlining fee disclosure requirements and iron-out obligations like the design and distribution obligations.”
Additionally, the group wants the government to commit to implementation timeframes that would see legislation introduced into Parliament this year.
“Following its release we would welcome the opportunity to meet to discuss how the government can improve the financial wellbeing of all Australians by ensuring they have access to quality financial advice,” it said.
