Produced By: Ensombl
In recent years, the financial advice landscape in Australia has undergone rapid transformations—some necessary, some controversial, and many that have sparked ongoing debate. From the Banking Royal Commission to the introduction of new education and compliance standards, financial advisers have been compelled to adapt. The result has been a profession in flux, squeezed by intensifying compliance obligations, a dwindling adviser population, and a growing demand for quality advice. In the midst of this turbulence, a spotlight has landed on a recently introduced private member’s bill that aims to modernize the statement of advice process and, in a broader sense, enhance the professional and ethical standing of the financial advice profession.
One of the key figures behind this bill is the Honorable Bert van Manen, Chief Opposition Whip and a former financial planner. In an industry that often struggles to make its collective voice heard at the legislative level, his professional background is unique. The bill he has proposed has wide-ranging implications, particularly around the documentation of advice through Statements of Advice (SOAs) and Records of Advice (ROAs). It also floats the possibility of “qualified privilege” for financial advisers—an acknowledgment that what advisers do is not mere product selling, but rather a professional undertaking that centers on strategic advice and operates under robust ethical standards.
This article explores the background, ramifications, and ethical dimensions of this proposed legislation. We will also delve into the broader context: Michelle Levy’s Quality of Advice Review, ongoing government inertia, and the potential recognition of financial planning as a bona fide profession on par with accounting, law, and engineering.
The evolution of financial advice over the last decade has been tumultuous. Following the Global Financial Crisis (GFC) of 2008, the industry faced a series of regulatory shake-ups intended to address unscrupulous practices that came to light during and after the crisis. These reforms—often labeled “FoFA” (Future of Financial Advice)—brought new disclosure obligations, fee structures, and bans on certain types of conflicted remuneration.
The pace of change accelerated after the Financial Services Royal Commission, which uncovered further ethical and systemic issues in the banking, superannuation, and financial advice sectors. Advisers found themselves navigating a barrage of obligations, from stricter education requirements to complicated compliance regimes. These measures, while aimed at improving consumer protection, also triggered the departure of thousands of experienced advisers who found the administrative burden too onerous.
Simultaneously, consumer demand for advice has grown. Australians are grappling with more complex financial decisions—retirement planning, insurance, growing superannuation balances, and the potential for intergenerational wealth transfers. The growing demand for high-quality advice, however, seems to clash with a shrinking adviser population and rising costs. The question thus becomes how to preserve high standards of advice, while ensuring the service remains accessible to the broadest possible slice of the population.
Into this environment stepped Michelle Levy’s Quality of Advice Review (QAR). Her recommendations, released a couple of years ago, offered a blueprint to reduce unnecessary red tape, while still protecting consumers from poor or conflicted advice. The government’s initial response was encouraging. Both sides of politics indicated support in principle, but details stalled. Over the past 12 months, momentum around these recommendations has largely dissipated.
One of the most noteworthy proposals from the QAR was the removal of the traditional Statement of Advice. The idea was that advisers would provide advice in a format more akin to a “record” than a bulky, technical document. In many respects, this heralded a shift toward a more streamlined process that acknowledges the professional nature of advice. The proposal recognized that a short, relevant document can be more beneficial to the client than an overly technical, 80 or 100-page SOA that often goes unread.
However, concerns soon emerged about the potential pitfalls of completely eliminating statements of advice. Would the absence of a formal document undercut consumer protection? What happens if a dispute or misunderstanding arises? Where is the client best served in terms of clarity? Despite these questions, many financial advisers and industry bodies have supported at least some form of reduced documentation and increased flexibility. Unfortunately, despite the government’s initial enthusiasm, there has been minimal progress in implementing these changes.
Against this backdrop, Bert van Manen introduced a private member’s bill aimed at rethinking the documentation requirements of financial advice. His main proposition: scale back the required documentation to something more akin to a record of advice (ROA), rather than the bulky SOA format that dominates the industry today. The bill stipulates that advice, particularly when restricted in scope, should be captured in a concise and digestible form that clients will actually read.
Van Manen’s rationale stems from his own experience as a financial planner. He recalls how many of the country’s successful firms began by serving younger or less affluent clients, offering them basic insurance advice or an initial foray into superannuation. Over time, these relationships grew. A younger client might initially purchase an income protection or life insurance policy, then return years later for a full retirement plan. The concern is that today’s regulatory environment effectively shuts the door on such incremental relationships. Prospective clients can be deterred by the expense and complexity of obtaining even the most straightforward advice. In essence, the cost to serve these individuals has become prohibitive, undermining the advisor-client pathway that historically fueled the profession’s growth.
Van Manen emphasizes that the value of financial advice lies fundamentally in strategy rather than product selection. A suitable product is simply the endpoint, the tool that brings a well-crafted strategy to life. By requiring overly detailed documentation at every juncture—even where advice is narrowly scoped—advisers incur significant costs that must be passed on to clients. The proposed bill thus attempts to treat the documentation requirement in proportion to the scope of the advice sought.
Central to any discussion of reducing regulatory paperwork is a question of ethics. Regulations, after all, exist to protect consumers from unscrupulous or negligent practices. Indeed, many of the reforms over the past decade were direct responses to high-profile cases where clients were ill-served, losing their savings through either incompetent or unethical advice.
Yet ethical practice is not solely the product of heavy regulations. In fact, a strong case can be made that a more flexible, streamlined approach, coupled with strict accountability, could yield better outcomes for clients. Here’s why:
In short, the ethical integrity of financial advice rests on clarity, accountability, proportionality, and professional judgment. A streamlined model of documentation, rather than an unregulated free-for-all, can potentially achieve those ends more effectively than the current, overly complex system.
One of the most intriguing aspects of Van Manen’s proposed bill is a section that mentions “qualified privilege.” While often overshadowed by the discussion of Statements of Advice, this feature has far-reaching implications for the standing of the financial advice profession. Qualified privilege refers to a legal concept that, in some contexts, protects certain professionals—lawyers, accountants, engineers—from liability when they render advice in good faith, within the confines of their professional standards, and in compliance with the law.
Financial planning historically has lacked this broad recognition of professional standing. Unlike law or engineering, where professionals have “limitation of liability” as a hallmark of their recognized profession, advisers have been forced to rely primarily on licensing regimes and indemnity insurance. When the notion of qualified privilege surfaces in legislation, it signals that the government may finally be willing to treat financial advice as the professional service it aspires to be, rather than a mere product distribution channel.
If qualified privilege were enshrined in law, advisers operating ethically and within the boundaries of industry standards could enjoy the same respect and protections as their peers in other professions. It does not mean absolving advisers of responsibility or allowing bad advice to go unpunished. Rather, it acknowledges that qualified, competent professionals should not be held personally liable for honest, good-faith judgments made according to best practices and established regulatory frameworks.
From an ethical standpoint, granting qualified privilege reinforces the profession’s core duties—to act in the client’s best interest and to maintain rigorous ethical standards. Far from diminishing accountability, it raises the bar. By embedding the financial advice profession into Australia’s professional services framework, qualified privilege fosters a higher level of self-regulation and a clearer culture of ethics. Advisers would be recognized legally as professionals who are bound by a code of ethics, just as lawyers are bound by legal professional rules and accountants by accounting standards. This legal recognition, in turn, demands that advisers diligently uphold those standards or face professional sanctions.
Despite the clear logic and potential benefits of a bill to streamline advice, the path to enactment is not straightforward. As Van Manen notes, the current government has signaled support for Michelle Levy’s recommendations but has made few decisive moves to bring them to fruition. Instead, the political environment remains opaque, and industry groups and participants are often required to sign non-disclosure agreements when discussing potential changes with the government.
This lack of transparency is unsettling for a profession that wants clarity on its future regulatory and legislative environment. It stands in marked contrast to the government’s stated aim of encouraging openness and accountability. Moreover, the stalemate perpetuates uncertainty, which can stifle innovation and prompt still more advisers to leave the field, exacerbating the advisor shortage.
Van Manen’s private member’s bill, while unlikely to be debated and passed in the normal course of government business, functions as a catalyst for broader public conversation. It offers a policy foundation and a legislative “marker” upon which future reforms could be built—whether by the current government or by an incoming government after an election. By putting forward specific provisions for simpler advice documentation and introducing the concept of qualified privilege, the bill encourages professional associations, consumer advocates, advisers, and politicians to coalesce around solutions rather than merely airing grievances.
For real change to occur, however, the initiative cannot rest solely in the hands of politicians. Van Manen urges the financial advice profession to stand firm on its ethical credentials and to continue speaking publicly about the value of strategic advice. He emphasizes the importance of highlighting that financial planning is not merely about selling insurance policies or investment products; it is about formulating and implementing strategies that improve people’s financial lives.
This message aligns strongly with the ethical imperative: if one believes in the transformative nature of quality advice, it is only right to make advice more accessible and less intimidating. A streamlined record-of-advice model goes a long way toward accomplishing exactly that. Recounting his own time in the industry, Van Manen recalls the days when an adviser-client relationship might begin with a simple product solution. Over time, as trust developed, clients sought out deeper, more comprehensive planning. That pathway, however, is often thwarted by regulatory complexities that drive up the cost of entry.
A Profession-Wide Ethical Stand
From a practical perspective, Van Manen’s bill may not become law in its current form, especially given the traditional challenges that private member’s bills face. But the conversation it spurs may pave the way for meaningful regulatory reform. If the proposed elements around streamlined advice and qualified privilege gain widespread acceptance—and if industry associations rally behind these ideas—future governments may incorporate them into a more comprehensive legislative package.
For advisers, the message is clear: keep the momentum alive. Seek out conversations with policymakers, voice support for constructive proposals, and keep educating the public on the indispensable role of strategic financial advice. If the result is an industry that can deliver cost-effective, high-quality guidance without drowning in paperwork, consumers will be the beneficiaries. Moreover, with recognition of the adviser as a true professional—someone deserving of legal privilege in much the same way as lawyers and accountants—the moral and ethical underpinnings of the profession will be firmly established.
Professionals in every field long for the day when they are judged by the quality and integrity of their work, rather than the breadth of the forms they file. Financial advice has reached an inflection point. It can either continue to tread water beneath layers of red tape, or it can seize the initiative to become a fully recognized profession—one that acknowledges and rewards ethical conduct, strategic expertise, and transparent client communication.
In a climate where trust in financial institutions can be fragile, the push for streamlined advice and qualified privilege may well serve as a beacon for a more client-centric and ethically grounded future. The call to action is straightforward: remain proactive, remain vocal, and continue to fortify the profession’s ethical backbone. The payoff, for advisers, clients, and the broader community, could be profound. If the financial advice profession can show that it deserves the same standing and protections as other established professions, it will have proven its longstanding assertion: that genuine, strategic advice changes lives—and does so with unwavering professionalism and ethics.
Accreditation Points Allocation:
0.10 Technical Competence
0.10 Client Care and Practice
0.10 Regulatory Compliance and Consumer Protection
0.30 Total CPD Points