The Financial Planning Association (FPA) and other peak bodies representing the advice profession have come out mostly in support of the Quality of Advice Review consultation paper.

FPA says in its submission to the paper that the review has “effectively” defined a whole new advice framework for the provision of financial advice.

The peak body says it supports the overall intent of the proposals to move to a more principles-based approach to regulating the provision of financial advice, with a focus on the output rather than the inputs of the advice process.

“The intent of the reform package has the potential to change the focus of the law from the inputs into the advice and the advice process (conduct, research, etc), to focus on the outputs (the quality of the advice),” the FPA submission says.

“This is a positive outcome and in line with the regulation of professions.”

Quality of Advice Reviewer Michelle Levy favours a principles-based approach involving fewer defined terms, less prescription and more flexibility.

In the consultation paper released last month, she said “changes need to be substantial if financial advice is going to be widely accessible and truly affordable”.

The FPA says the consultation paper addresses many of the disconnects between being regulated as a product distributor but providing a personal professional service.

“In our view, the regulation of financial advice as a financial product has never sat well with the professional financial planning services provided by FPA members,” the FPA submission says.

“For this reason, the FPA welcomes the paper and the practical solutions to improve the operation and structure of the financial planning profession to simplify and support the professional services provided by the financial planning profession for the benefit of Australian consumers.”

The Advisers Association says the proposed changes in the consultation paper, if taken up, will ultimately make advice more affordable and accessible for consumers.

CEO Neil Macdonald says the proposals create potential for financial advisers to change not only the way they service clients, but also how much they charge and therefore how many clients they serve

“It’s old news that there are currently not enough advisers to service the number of people wanting advice,” Mr Macdonald said.

“The new news is that the significant time savings that will occur as a result of recognising an adviser’s professional judgment and removing much of the unnecessary paperwork and duplication that currently exists within the profession will mean advisers will be able to service many more people.”

The Institute of Managed Account Professionals has also made a submission, saying the paper made a “couple of good points” including one on the bureaucratic approach from the Australian Securities and Investments Commission (ASIC).

“ASIC has shown little interest in addressing duplication and repetition to avoid confusion despite requests to do so,” the submission says.

“There needs to be direction to the industry that if an investor has provided consent to fees being deducted from their investment that this must be accepted and that clients should not be made to provide consent multiple times to avail the bureaucratic requirements of large organisations.”

Click here for the FPA submission.