Quality of Advice Review chairwoman Michelle Levy will propose a radical overhaul of the financial advice laws, scrapping reams of consumer protection regulations.
that over-regulation has priced most Australians out of financial advice, just as millions of Baby Boomers approach retirement.Steven Siewert
“It is clear the current regulatory framework is a significant impediment to consumers accessing financial advice,” Ms Levy, a partner at blue chip law firm Allens, wrote in the unpublished report.“It is also preventing advisers and institutions providing advice and assistance to their customers ... Removing regulatory requirements could make it much easier for industry to provide financial product advice and provide it at a lower cost.
But consumer groups have warned against rolling back financial advice regulations, claiming the sector is still plagued by conflicts of interest. A total of $3.6 billion in financial advice-related misconduct compensation has been paid out to consumers in recent years, according to data released by the corporate regulator last week.
Annual fee disclosure statements would be abolished under the proposed changes. Requirements to obtain client agreement to renew fee arrangements and signed consent to deduct advice fees from financial products would also be scrapped. “Consumers do not want lengthy documents, they do not want templated text and they do not want documents filled with information designed to demonstrate the adviser has complied with [the law].”
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