The Finsider is our new blog series providing insights into the Australian financial services landscape. We interview experts who will share their perspectives on ideas and issues facing the financial industry today and in the future.

Our first special guest is Michelle Levy, who specialises in financial services law and was appointed to lead the Government's Quality of Advice Review. Keep reading to hear her thoughts on what was her biggest surprise during the Quality of Advice Review, and also what are the most important issues facing the industry.

From your work on the Quality of Advice Review, what do you think are the most important issues facing financial services industry today?

Trust and value are both significant issues.  They are also related.  Many consumers do not understand the financial services industry – they do not know what the various participants do and they do not know how they can help them.  What they have seen are the scandals.  The result is that they not only don't value the industry, but they don't trust the participants.  And so consumers rarely seek financial advice and when they do they do not want to pay for it – or they do not want to pay an appropriate fee for it.

What was the biggest surprise from the Quality of Advice Review ?

I was surprised by the extent to which the individual advisers feel under siege.  To an extent I think their feeling is justified because the system – the law, the regulator, product issuers and licensees – does look to individual financial advisers to address misconduct in the financial services industry.  This might be appropriate if the type of misconduct we have seen over and over again (most recently with Dixon Advisory) was caused by poor or fraudulent conduct by individual advisers.  But that is not the case and therefore it is both unfair and unlikely to be effective.

One of the themes of the Royal Commission was that misconduct in the financial services industry was not the result of a few 'bad apples'.  Instead, it was pervasive and structural.  The financial system was set up to reward selling and profit.  And so to really protect consumers from poor advice, we need to start with the conduct of the product issuers, not the financial advisers.

How are you managing reconciling the different platforms and viewpoints in the Quality of Advice Review?

I have considered everything I have read and been told from the perspective of consumers - my job was not to come up with a compromise between the interests and views of different industry stakeholders.  I thought about how the changes that were advocated for by stakeholders would affect consumers and asked the question: would consumers be more likely to be able to access good quality financial advice if this particular change was made?  I also thought about what harm might flow, again to consumers.  This is not to say I disregarded the interests of the industry participants – but their interests were and are relevant only to the extent they can help serve the interests of consumers.

What is one change you would like to see happen in the financial services industry in the next 12 months?

I am ambitious so I would like to see more than one, but as a start: financial advice delivered to consumers in a language and form they understand and want.  This means I would not see anymore 50 page statements of advice filled with jargon and templated text.

What advice would you give to those starting out their careers in the financial services industry?

The same advice I would give to anyone starting a new career – I would encourage them to take great care in everything they do – even the dull and menial - and in so doing to take pride in what they do.  I would also stress the importance of complete honesty – with themselves, their colleagues and their clients.  It's an important habit.  I would encourage them to be ambitious for their clients and themselves.  Lastly, I would encourage them to have fun and enjoy their new career.

About Michelle Levy

Michelle specialises in financial services law. Michelle's clients include the wealth management areas of each of the major banks, life insurance companies and superannuation funds. She provides advice in all aspects of financial services regulation – ranging from product development and distribution, regulatory investigations and remediation projects.  She also acts for clients buying or selling financial services businesses.

Michelle is a member of a number of committees and working groups that consult with Government and regulators on financial services regulation. She is the former Chair of the Law Council of Australia's Superannuation Committee and continues to be a member of the Committee. Michelle co-authored the LexisNexis FoFA Handbook and is a regular contributor to various journals and publications. Michelle has been appointed to lead the Government's Quality of Advice Review.