COTA Australia welcomes the opportunity to provide a submission to the Treasury’s Quality of Advice Review. We consider this Review both essential and timely, or even overdue, as the roots of the relevant questions date back to the reforms instituted as part of the government’s response to the Financial System Inquiry (FSI), which was codified as the Financial Services Reform Act, 2001. This Act sought to harmonise the regulatory regime for the financial services industry and establish a single licensing framework for the provision of financial services, including the provision of financial advice.
Many of the recommendations of the FSI were both overdue and common sense, such as new rules for the handling of client property and money. Other recommendations that made their way into the Financial Services Reform Act, such as those involving personal advice for retail clients may not have worked as well as we would have hoped. Overall, we now believe that it is time for a new iteration of the Financial System Inquiry to ensure that the regulatory structure of financial services is fit for purpose in the rapidly evolving circumstances that Australia faces.
We also note that the issues facing the Review are both broad and complex. Consequently, we would urge the Reviewer to consider issuing an Interim Report within the current timeframes, and urge the Government to grant an extension to the Review timeline to enable consideration of responses to the Interim Report by interested parties before issuing a Final Report in 2023.
We also note that without a legislated statement of purpose for superannuation, there is still scope for funds, clients, and advisors to speak at cross purposes. We see the overall aim of superannuation as to provide a stable and secure source of funding people’s retirement income. We understand this to be outside the scope of this Review as currently constituted but note the importance of the new Government’s commitment to legislate the purpose of superannuation.
