From left: Michelle Levy, Sarah Abood, Paul Barrett, John Maroney and Tahn Sharpe

With stronger consumer protections in place in the advice industry and conflicted remuneration eliminated, Quality of Advice Review lead Michelle Levy has argued larger institutions are in a better place to receive more flexibility to give advice.

The advice review proposals were released earlier this month which are now under a government consultation.

The contentious part of Levy’s proposals – which has seen opposition from consumer groups and reticence from the minister – is allowing large institutions more freedom to give advice.

Levy previously responded to criticism her proposals exempted institutions from any best interest/good advice duty, explaining that while employees are exempt (as they are required by law to act in the best interest of their employer) the institution must act in the best interest of the customer.

Jones has publicly spoken about his discomfort for giving super funds more leeway with the risk that doing so may go further down the path of vertical integration.

However, Levy argued the institutions are a natural place to give advice.

“Not all advice, but some advice,” Levy said at the SMSF Association National Conference on Friday in Melbourne.

“I’ve spoken quite a lot about the idea of financial institutions being obliged of having a duty to speak to their customers and give them – I’m using the term loosely here – sound advice. You don’t pick up a financial product off the shelf and take it home.”

Levy noted that a customer’s relationship with a super fund is likely to be the longest commercial tie in their life and if funds are serving client needs in every other facet there isn’t a just reason not to allow them to assist with advice.

“It’s non-nonsensical and stupid to think these funds shouldn’t be able to give them personal advice along the way to assist them,” Levy said.

“That wasn’t my purpose, to help superannuation funds or banks, it was about the customers.”

Levy added the advice ecosystem is in a different era with laws in place to prevent conflicted remuneration and other potential anti-consumer pitfalls.

‘Stupid situation’

Alluding to comments she made recently about banks already giving advice on products, Levy said they aren’t hamstrung in other areas of product, just financial advice.