A regulatory framework that empowers consumers to get limited advice on simple or basic issues is the key outcome the FSC seeks from the Quality of Advice Review.
The FSC is seeking three key changes that will reduce the cost of advice by 40 per cent placing limited advice at the centre of helping meet the superannuation, life insurance, investment and broader financial needs of Australians.
Firstly, the FSC seeks the removal of safe harbour steps compelling the consideration of consumer circumstances well beyond simple advice needs that will end ‘tick a box’ advice in Australia.
Secondly, documentation requirements should be simplified supporting a shorter Letter of Advice with obligations that can be scaled up or down in accordance with consumer need and the professional judgement of the adviser. Currently there are entirely separate disclosure regimes for when you need advice and when your circumstances change despite the fact no advice need is the same.
Lastly, all advice should be consolidated into personal advice where it considers the individual circumstances of the consumer, or general information where it does not.
All these changes work in tandem to untangle a regulatory net making the advice consumers need most, the most difficult to provide. These changes will ensure limited advice is at the centre of the advice process. and will provide a level playing field for digital advice with regulation that is fit for the future.
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