The Quality of Financial Advice Review’s Proposal Paper recommendations would weaken core consumer protections and fuel the provision of poor quality advice by vertically integrated institutions. They would incentivise major banks, insurance companies and superannuation funds to provide conflicted sales pitches dressed up as advice. Consumer groups strongly support the retention of a principles-based best interests duty. This is a critical consumer protection that requires financial advisers to act in the best interests of clients, not their own, and to face significant penalties where they fail to do so. The proposed watering down of the best interests duty to an obligation to give ‘good advice’ will push financial services regulation back decades.
