SIMPLIFICATION is at the heart of a Private Members’ Bill being ushered into Parliament today.
Chief Opposition Whip and Member for Forde, Bert van Manen MP, said today’s step has come after considerable conversation with the finance industry.
The Corporations Amendment (Streamlining Advice Process) Bill 2024 has been brought forward due to the Government’s continued inaction on the issue according to Mr van Manen.
“People in the industry feel that the Albanese Government has not done enough, and certainly not done anything in a timely enough manner, to deal with some well-recognised issues,” Mr van Manen said.
“After a lot of years of seeing the system become more complex and more expensive for everybody involved, we are determined to make life simpler for all.”
Recommendations of Michelle Levy’s Quality of Advice Review in relation to Statements of Advice (SOAs), which are yet to be implemented by the Government, have helped form the basis of the Bill.
While the Government has a department of 1,600 staff and a team of legislative drafters at their disposal, it has required action from the Coalition Opposition to get these reforms into Parliament.
Levy’s review found that SOAs are universally criticised for being too complex and adding significantly to the cost and regulatory burden of providing financial advice.
The review’s Financial Adviser Survey also found that 73 per cent of respondents reported that changes to the SOA would most effectively reduce regulatory burden and 90 per cent of respondents stated that the requirements for SOAs should be decreased.
Mr van Manen said the Bill is intended to support the financial services industry by removing red tape and allowing them to focus on what they do best – providing financial advice to everyday Australians.
“Financial planners and advisers have waited patiently for the Albanese Government to act on Levy’s recommendations. Time is running out before an election is called and I have decided to act by bringing forward the most impactful reforms for the advice community,” Mr van Manen said.
“The existing SOA requirement is burdensome, repetitive and rarely read by clients, with its complexity leading to significant additional administrative work for financial advisers at an increased cost to the client.
“Amendments in this Bill will require a financial adviser to provide a Letter of Engagement and a Record of Advice for any client seeking advice.
“The Coalition is genuinely working to improve outcomes for hardworking individuals and small businesses in Australia to access support and advice needed in managing their money,” he said.
The Bill was seconded by the Shadow Assistant Treasurer and Shadow Minister for Financial Services, The Hon. Luke Howarth MP.
Mr Howarth said Labor’s inaction on financial advice reforms is leaving Australians under advised and under-insured.
“We are fast approaching 700 days since Michelle Levy handed the Albanese Government her Quality Advice Review’s final report. The Government has failed advisers by leaving implementation of the Review’s most important red tape reducing recommendations to the very last minute.
“Action on reforming the burdensome SOA process is long overdue and these reforms will significantly reduce the time and cost of providing advice,” Mr Howarth said.
For more information on the Bill: Corporations Amendment (Streamlining Advice Process) Bill 2024 – Parliament of Australia
