Webinar: Michelle Levy explaining Quality Advice Review CP

I attended the Michelle Levy webinar organised by Professional Planner recently and a few thoughts popped into my head based on the discussions:

* s961B may go from the Corps Act BUT the obligation to act in the best interests of the client remains in the Code of Ethics (Standard 2). This means the “safe harbour steps” will most likely still be followed to create advice, although they will not be in the Corps Act. The safe harbour will “sit behind the scenes”.

* for me, this means the advice creation process will not change (much, if at all)

* the main difference may be around SOAs and ROAs. Matt Lawler raised a good point in the webinar about SOAs sometimes being critical to successfully defending client claims. So it’s likely we might see the SOA as currently legislated under s946 and 947 of the Corp Act go, but industry will still require advice to be presented in writing although in a less onerous way

Some advisers may simply “record” their advice and be sure to support this with maintaining complete records

* the onus to ensure “good advice” is provided sits solely with the licensee and adviser – very similar to the situation now. s961L would remain (although need to be amended slightly) which means licensees would be required to take reasonable steps to ensure advisers are providing “good advice”

* the CP confirms that there already exists a plethora of legislation and other mechanisms to support some of the recommendations made – for example, s912A general obligations of licensee, s961L, misleading and deceptive conduct provisions under the Australian Consumer Law, the Adviser Code of Ethics, etc

* the idea of returning to potential “product flogging” was raised because of the suggestion to exempt product providers from having staff qualified under the “relevant provider” education standards under certain circumstances.

I feel this last point warrants a lot more discussion and input from the advice industry. We do not, as a profession, want to return to a time of “profit before people”, with those making the decisions to flog product hoping they will have enough time to “get away with it” before jumping ship (from the institution) and not being held to account.

There much more to be discussed about the QAR and CP ….

I’d love to hear what other people have to say, or think about the webinar (watch here)

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