‘We will push back’: Consumer group ups ante against QAR

Rosie Thomas, the newly appointed national spokesperson for consumer advocacy group Choice, has praised the government’s “measured and sensible approach” to implementing the Quality of Advice Review, but urged it to close the door on some of its more controversial proposals.

“I can understand why some stakeholders want it to move faster, but we want to get it right,” Thomas told the AIOFP national conference in Canberra on Wednesday. “We had concerns with the more radical recommendations in the review.”

The comments indicate Thomas, who was promoted from related party Super Consumers Australia to become director of campaigns and communications at Choice in August, will maintain the hardline stance against advice industry deregulation set by former Choice CEO Alan Kirkland, who this month became the powerful new ASIC Commissioner with responsibility for advice.

In an interjection from the floor, Sequoia Financial Group CEO and AIOFP director Garry Crole said Choice should, given its focus on consumer rights, be advocating for the public to receive independent advice, rather than discouraging them.

In reply, Thomas said Choice was willing to work with advice associations on some policy areas – attempting to have managed investment schemes added to the Compensation Scheme of Last Resort is a case in point – but made clear it would “push back” against any proposals it did not believe were in consumers’ best interests.

“We want to see access to quality advice – so that is core, making sure it is quality is our focus,” she said.

“We recognise that is probably not going to serve everyone, but we don’t think everyone needs advice… We’re talking about people’s savings – this isn’t an area where you can say ‘most of it is okay, so we should let the rest of it through’.”

The exchange came just weeks after the government introduced the first batch of draft legislation to implement the review’s recommendations – almost 12 months after the report was handed to government. Although the government has accepted “in part or in principle” 14 of the 22 recommendations across three streams, the first exposure draft pertained to just half of the first stream of proposals.

Minister for Financial Services Stephen Jones admitted at the FAAA Congress last week in Adelaide that he was “concerned” the industry would be underwhelmed by the draft, reminding them there would be more to come.

“I was really concerned… do I put the first lot of legislation out for consult because I was really worried that people would go ‘is that all, is that it? We’ve been talking about this since the beginning of the year and this is it?’ as of course you know and others know, that’s not it,” Jones said in a Q&A session with FAAA chief executive Sarah Abood.

“That’s just what we could get out the door as quickly as possible. I don’t want to slow things up that everyone has agreed on is easy to do.”

Industry leaders have expressed dismay at the slow progress of the reforms for months, with anger boiling over at the Conexus Financial QAR Roadshow in March at Jones’ claim he was acting with some “urgency”.

Existing efficiencies

ASIC senior executive leader for financial advice Leah Sciacca and AFCA lead ombudsman for advice Shail Singh both declined to comment on the QAR’s political implementation. But they said both government agencies shared the goal of boosting access to advice and were doing their bit within the confines of their respective regulatory roles.

Sciacca pointed to ASIC’s willingness during the Covid-19 pandemic to allow advisers to provide Records of Advice in certain circumstances rather than the more cumbersome Statements of Advice.

“Now obviously the government is now considering QAR, and SOAs are squarely within the lens of potential areas of change,” she told the conference. “But I think there are, within the existing framework, areas where efficiencies can be gained, and that’s our focus – to the extent we can provide guidance and clarify where there is confusion, we’re keen to do that.”

Singh, who was formerly a practising adviser (as was Sciacca), said the industry should now be considered a profession, given complaints levelled against it by consumers are steadily declining.

“I chose to go into the profession, I’ve always seen it that way, and the organisation I worked for always saw it that way,” Singh said.

“From AFCA’s perspective, we have 47 disputes a month currently for financial advisers. If you look at the last 5 years, that’s come down significantly, and the trend is still down.”

Singh claimed AFCA was also painting a rosier picture of advice complaints to professional indemnity insurance underwirters and brokers, which could put downward pressure on premiums, along with providing seminars to advice firms on how they can avoid disputes with clients.

“Those are [AFCA’s] little bits [to assist the conversation] around accessibility,” Singh said. “I think it’s terribly important.”