Clockwise from top left: Zoe Higgins, Phil Anderson, Paul Derham and Alex Euvrard

Relief from the fee consent regime will be one of the major wins for advisers from the Quality of Advice Review, but Financial Advice Association head of policy Phil Anderson said the needle needs to move further.

The government has accepted the Quality of Advice Review recommendation to streamline fee consent into a single form, but Anderson said doing this will be challenging.

“Maybe we’re not aiming far enough, maybe the real outcome here is the client is able to press a button and say ‘I agree to this this’ and there are no paper based forms [and] it’s electronically sent to the product providers immediately. We’ve got to be clear on our goals here,” Anderson said at a breakfast hosted by compliance firm Holley Nethercote.

The fee consent rules came into effect in 2021 and require advisers to obtain written consent from clients before they can deduct fees from the client’s account, and to review ongoing fee arrangements each year.

Infocus has been working on an app to help streamline the fee consent process and regardless of whether the QAR reforms change the regime, the app will still function as a digital consent portal, which the licensee identified as a technology function much of the industry is lagging on.

However, much of the contention in the fee consent regime has been the lack of industry standardisation.

Gimme shelter

The proposed change to fee consent isn’t the only relief from the government’s QAR response, with the minister accepting Recommendation 5 of the review to remove the safe harbour steps, despite previously expressing opposition to doing so.

Holley Nethercote managing partner Paul Derham said the safe harbour in its current form leaves the adviser to prove they have complied, but without it the onus goes back onto the regulator.

“ASIC has done that before in reports and found around half the [Statements of Advice] that it looked at might have been in the best interest of the client under the wider best interest duty test, but didn’t prove the adviser had gone through those steps,” Derham said.

“If we take away safe harbour the onus would be on ASIC to prove the advice is not in the best interests of the adviser’s client. It’s a little bit harder for a regulator, AFCA or the court to show the adviser has failed at this best interest test if we remove the safe harbour.”

Derham noted the best interest obligations for company directors, trustees of managed investment schemes, and mortgage brokers have no safe harbour requirement.

Interestingly, Holley Nethercote special counsel Zoe Higgins identified a potential flaw in QAR lead Michelle Levy’s good advice duty that has similarities to the controversial catch-all Step G in the safe harbour.

“There’s going to be further consultation on [the introduction] of the good advice duty… I don’t know how likely that is to come in,” Higgins said.