Draft terms of reference for the anticipated review of financial advice, including broker commissions, have been released by Treasury, setting in train an inquiry recommended by the Hayne royal commission for next year.

The review will consider whether measures already implemented have improved financial advice quality and will examine further reforms or changes that may be needed, and whether any measures or obligations are redundant or can be streamlined.

The National Insurance Brokers Association (NIBA) says the draft terms of reference point to an extensive review of advice to identify opportunities to streamline and simplify compliance obligations and remove duplication.

“The key area of focus for NIBA is to ensure that there is not a one-size fits all approach,” CEO Phil Kewin told insuranceNEWS.com.au.

“NIBA looks forward to actively participating in the consultation process, to ensure that the unique role of the insurance broker is clearly understood through each phase of the client journey.”

The Hayne royal commission focused on advice in areas other than general insurance, but its final report included a recommendation that a broad review revisit whether a broking exemption to the ban on conflicted remuneration remains justified.

The draft terms of reference confirm the review will look at the remaining exemptions to the ban on conflicted remuneration in life and general insurance.

Topics also include how to improve the clarity and availability of documents and disclosures so consumers are presented with clear information without unnecessary complexity, and it will look at the concepts of financial product advice, general advice and personal advice.

Similar issues have been raised in an interim report released as part of the Australian Law Reform Commission three-year inquiry into simplifying financial services laws and regulations.

The Treasury advice review will also examine life insurance remuneration reforms and their impact on levels of coverage and the future of the “safe harbour provision” that applies to advisers in showing they have complied with the best interests duty.

Feedback is initially sought only on the draft terms of reference, with submissions due by February 4.

“There will be opportunities to comment on substantive policy issues once the review is underway,” Treasury says

The year-long process will be led by an independent reviewer and supported by a secretariat based in Treasury, with a report expected to be delivered to Government by December 16 next year.

“The Government is committed to ensuring that Australians have access to high quality, affordable and accessible financial advice,” the consultation announcement says.

More details are available here.