Michelle Levy, partner at Allens law firm and chairwoman of Treasury’s Quality of Advice Review.The Levy review proposed replacing the best interests’ duty, introduced in 2012, with a goal of weeding out poor financial advice, with a new “good advice duty”.
In its submission to the Levy review, the ISA, which represents funds including HESTA, Cbus, Australian Super and Hostplus, warned the changes will present a “catalyst for consumer harm”.“The best interests duty was a critical piece of the Freedom of Financial Advice reforms.
The industry group raised concerns an adviser could technically satisfy the good advice rule by advising a client consolidate multiple superannuation accounts, even if the client’s current super funds involved were failing performance tests. “The proposed watering down of the best interests’ duty to an obligation to give ‘good advice’ will push financial services regulation back decades.”Association of Superannuation Funds of Australia have endorsed the proposed changes.
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