Future of the Advice industry remains in doubt, despite review

For months, Australian Advisers have been waiting with bated breath for the final Quality of Advice Review (QOAR) report from Michelle Levy examining Australians' access to high quality, affordable and accessible financial advice. It was released by the government last week.

This review was set to overhaul the industry, reduce onerous red tape and duplicated regulation and make advice more affordable for Australians. When the Minister for finance Stephen Jones made the report public, it became clear that in actuality, none of this was going to happen in any meaningful way.

While there are 22 recommendations regarding improving the industry for consumers and Advisers, Mr. Jones has requested a stress test of these recommendations, meaning that they would be 12 -24 months away at best. In other words, this industry isn’t changing anytime soon.

Almost every Adviser we know has closed their books, meaning they aren't taking on new clients. Some Advisers are still turning away clients with less than $5m in investment assets, regardless of what the client is offering to pay. Clearly the situation is pretty unaffordable for most Australians.

On the bright side, Levy’s report reiterates the importance of having an insurance Adviser (Broker’) when applying for life insurance. Levy said that, “despite their shortcomings,” commissions were necessary, or consumers may not get the insurance or the advice they need.

Andrew Hall, CEO of Insurance Council of Australia, said “I think what she’s [Michelle Levy] saying, quite rightly, is that where brokers add value to the sales process of a product like insurance, is that they can really work out the right product across a range of products, to suit the risk problem that a company, a family or an individual may have,”

Specifically on the difficulty of obtaining advice, Hall explained “there has likely been an “an over-correction against financial advice, that’s made it harder to get it.”

Fortunately for our clients and clients of Mortgage Brokers who refer to us, they’re able to access our insurance advice services to get the best life solutions, choosing the right provider from the market.