The Federal Government’s response to the Quality of Advice Review (QAR) has left Michelle Levy, who made 22 recommendations in her final report, “a little disappointed”. 

Ms Levy fears it will not go far enough to improve the quality and accessibility of advice for millions of Australians who need it. 

Financial Services Minster Stephen Jones announced last week the Government has decided to take up “in full or in principle” 14 of the 22 proposals including keeping the commissions remuneration model and permitting super funds to provide personalised retirement advice. 

But the Government is holding back on Ms Levy’s other proposals including around broadening the definition of personal advice and creating a good advice duty to replace the best interests duty test and related obligations until it has completed further consultation. 

Mr Jones says the Government expects to finalise its position before the end of the year. 

Ms Levy in her final report proposed broadening the definition of personal advice so that it captures a “wider category of financial product advice” and describes it as “the foundation” of her other recommendations. 

“It will contribute to better quality advice, not poorer quality advice,” she said in her report. “In doing so, the recommendation will address one of the great mischiefs of the existing regime – it will stop providers giving general advice in circumstances where customers want and expect personal advice.” 

The proposal, if adopted, could mean insurers will be allowed to provide personal advice. 

In an interview aired today with ABC Radio National, Ms Levy says the “main recommendations which haven’t been accepted at this point... are those that will really address accessibility and will also help improve quality [of advice].” 

“So I think one of the most important things to keep in mind when you think about financial advice is not just the advice that your financial adviser gives. 

“It really crosses through into what most people would think of as advertising, so direct marketing, the pop-up on your app that says have you thought about life insurance… all of that is regulated at the moment as financial advice. It’s divided between what’s called general advice which doesn’t take into account your personal circumstances, and personal advice. 

“But general advice is where a lot of harm can happen and it’s all of those recommendations that address that which have not been accepted at this point in time by the Government.” 

Mr Jones says his approach is “to sort between the urgent and the important” and has therefore grouped the QAR proposals into three streams. 

Proposals around broadening the definition of personal advice and creation of a good advice duty come under the third stream’s Exploring New Channels for Advice. 

“Government consultation will test how these proposals might operate under different advice models, including digital advice models, and across sectors,” Treasury says in a statement in reference to the third stream. 

Ms Levy says the consultation is an “opportunity for people to keep thinking about what is it that we would like our institutions to be able to do to help consumers with their finances”.