Consumer advocacy groups may give some ground on proposed deregulation of financial advice. 

A group of consumer advocacy organisations has voiced support for two recommendations from the Quality of Advice Review to enhance access to financial advice, while maintaining their firm opposition to most of the inquiry's contentious proposals. 

The Australian Financial Review says it has obtained a letter signed by five consumer groups, including Financial Counselling Australia, Choice, and the Consumer Action Law Centre, requesting the government to consider shorter and more straightforward adviser disclosures than the current lengthy statements of advice. 

They also urged the government to eliminate “safe harbour” steps in which advisers have to show that they acted in the best interests of their clients. 

These two suggestions are seen as critical, as they were recommended by the independent review and identified as major drivers of the escalating costs of providing and receiving advice.

While the support of the two red-tape reduction measures is noteworthy, the groups, notably Choice, have been strong supporters of the 2012 Future of Financial Advice laws introduced by Labor, which included Statements of Advice and safe harbour provisions, among other reforms. 

The letter reportedly reiterates the organisations' opposition to the more controversial recommendations, especially the proposal to exempt banks, insurers, and super funds from the duty to act in clients' best interests when offering cheap and simple advice to customers.

The groups also criticised the proposed replacement duty of providing good advice as “poorly defined”, stating that they would only support the two measures if a clear, principle-based best interests duty remains for all providers in the Corporations Act. 

They supported the call for shortened and simplified mandatory disclosures but rejected the notion that advisers only provide records of advice upon client request. 

Financial Services Council CEO Blake Briggs has told reporters that the consumer groups' position reflects a “light touch approach” to expanding access to financial advice.

The letter follows criticism that the consumer groups had opposed the review's recommendations without presenting alternative solutions to address the social issue of decreasing access to advice for millions approaching retirement. 

In addition, the letter suggested the government evaluate the “quality and accessibility of relevant government programs” and the “scope and regulation of retirement phase intra-fund advice” provided by super funds to members while maintaining consumer protections.