The Quality of Advice Review proposal to allow non-relevant providers to provide advice could open the door for provisional advisers to become more commercially attractive, by operating in a similar function as a law clerk for a legal firm.

One of the key recommendations of the advice review was the ability for non-relevant providers – those who aren’t licenced to give advice – the ability to give advice if they aren’t receiving a fee or commission.

Speaking on a webinar hosted by Professional Planner in partnership with AMP, advice review lead Michelle Levy posited this is a way not only for super funds and institutions to give advice, but also smaller advice practices.

Levy, with a background in the law profession, compared to how a solicitor would work who would have a legal clerk doing much of the work in the background on behalf of the solicitor.

“It’s my advice, I get paid and I pay my law clerk – that’s how I think it should work,” Levy said.

“You go to a financial adviser, pay a fee for financial advice to your professional financial adviser. [The adviser] has done all the training and complied with the Code of Ethics.”

Levy highlighted that regardless of whoever is doing the background work, the burden falls to the licensed adviser who is directly receiving the fee or commission and it is up to them to perform the due diligence to make sure the advice is of an acceptable standard.

“It’s not that there isn’t a role for the paralegal – or paraplanner [in this context] – there is, but the advice provider for the purposes of the law is the supervising financial planner,” Levy said.

Noting the potential advantages of Levy’s proposal, AMP Advice CEO Matt Lawler said this presents an opportunity to make provisional advisers more commercially viable for small businesses.

“If you’re a practice and you’re thinking about bringing a young person into your business – they’ve done the education or [are] on their way, but they go through a professional [year] period where they’re supervised, but they’re not revenue generating at that point,” Lawler said.

“They could be revenue generating for those restricted areas of advice, simple superannuation and insurance – remembering they’ve done their degree or on their way to doing their degree.”

Commercial viability of PY advisers has been one of the main criticisms of the system, with small businesses concerned about investing in young advisers who would inevitably get poached.

Lawler said PY advisers are degree graduates and should be considered for giving advice under the guidance of a licensed adviser.

“At least if they’re generating some revenue during that period, it makes it easier for a small business to make a decision to bring a [PY] person in,” Lawler said.