The Minister for Financial Services Stephen Jones is “not compelled” by the recommendation in the Quality of Advice Review that financial planning regulation should be made more flexible to encourage banks and insurance companies to give their customers “simple” financial advice. Jones released the government’s response to the review yesterday, accepting the majority of its recommendations.  It will streamline the regulatory framework governing the financial planning industry, replacing “unwieldy” statements of advice, fee disclosure, consumer consent requirements and “legalistic” safe harbour provisions. It will make retirement income advice more accessible by allowing superannuation funds to expand their advice services. The author of the review, Allens partner Michelle Levy, argued that the current best interests duty should only apply to financial planners. For firms providing incidental, limited or simple advice, Levy recommended that a more flexible “good advice duty” be introduced. The government is likely to take this approach with super funds but Jones said he was not persuaded that the proposed model is fit for purpose for banks and insurers. Jones said: “The review has given us some principles to guide the conversation. But right now, more is needed to get it to the point when it can make a meaningful difference.  “Those who understand this space know that there is more work to do, even if you support the direction.” The Hayne royal commission report devoted a lot of space to the misconduct of financial planning services owned by banks and life insurance companies. No government would want to be remembered for allowing that to happen again. Levy’s recommendations start with the proposition that consumers should be able to get “incidental, simple and limited” advice as and when they need it, and that is usually when they are dealing with their bank, superannuation fund, insurer or investment manager. She says the self-interest of financial institutions should not preclude them from giving advice. “Financial institutions benefit from the products their customers hold and, because of that, they should provide them with the advice they need about those products. The law should encourage them to do so in a way that is not only safe but which serves the interests of consumers,” the review says. “Financial institutions will have an interest in the financial advice they provide to their customers. This does not mean financial institutions should not be able to give advice – that is unrealistic and not in the interests of consumers. “The challenge for the regulatory framework is to permit the self-interested to give advice in a way which is not only safe but which also services the interests of their customers and clients.” Jones said the government is not ruling this out but before it makes any decisions about the role of banks and life insurers in providing financial advice it will undertake further consultation with industry and consumer groups.