How will the QAR proposals make financial advice easier to access?

Q: How will the QAR proposals make financial advice easier for more Australians to access???

A: The QAR proposals pull on 5 supply levers to make financial advice more accessible and affordable, at scale:?

1. Simplify regulation?

2. Simplify advice?

3. Deepen supply via financial institutions??

4. Deepen supply via removing advice obstacles for super funds??

5. Leverage supply via technology??

At Ignition Advice, we welcome the proposed changes put forward in the Quality of Advice Review (QAR) Proposals Paper.??

The Proposals have also garnered broad support from across the industry because they offer realistic solutions to better enable the provision of high quality, accessible and affordable financial advice for retail consumers. ?

Australia has a large but resolvable advice problem. Since the Royal Commission, advice quality has indeed improved but at great cost: advice has become more complex, less accessible, and significantly more expensive. This has placed it out of reach for many, particularly those in a rapidly growing cohort looking for retirement advice.??

To address this problem, and create a realistic path to affordable, accessible, and high-quality financial advice for all Australians who would benefit from it, the Proposals pull on 5 important supply levers:????

1. Simplifying regulation by broadening the scope of personal advice, focusing on outcomes, and eliminating general advice. This will create a single advice “product” which can be delivered in larger volumes.??
2. Simplifying advice by implementing a “Good Advice” standard, which caters to and reflects the relative simplicity or complexity of the situation, and provides more effective consumer protection, while not pretending to be “best” or exhaustive.?This will provide simpler advice which benefits the consumer and can therefore be delivered at lower cost, faster, and at scale. ?
3. Deepening supply via financial institutions by broadening how advice is provided via more institutional involvement, and a wider spread of people within institutions delivering simpler advice.?Consumers expect advice from their institution, and this will enable institutions to provide it.??
4. Deepening supply via super funds by amending the superannuation sole purpose test to expressly permit the provision of personal advice about members’ interests in a fund, and to apply funds for that purpose.??As a category of financial institutions, super funds are an obvious source of advice for members. This will remove any remaining doubts about the ability of super funds to provide personal advice, including on retirement issues, allowing super funds to become major providers of advice, especially simpler advice.??
5. Leverage supply via technology by recognising that digitally delivered personal advice can be good advice just as much as human-delivered advice can be.?Digital advice is the multiplier which allows a deeper supply of simplified advice to have a larger scale impact on access and affordability. ?

Pulling these levers will ensure there will be more personal advice, more institutions providing advice, and more consumers realising the benefits of advice.??

And gluing it all together, is digital advice technology:?

• Digital advice allows good advice to be delivered at scale.??
• Digital advice allows people delivering advice to be leveraged.??
• Digital advice allows financial institutions to return to advice, and super funds to expand their advice delivery, secure in the knowledge that technology will provide assurance their advice is Good Advice. ?

Learn more in our full in-depth analysis and house views on the Proposals Paper.