In a recent LinkedIn post, researcher and speaker Dr Katherine Hunt suggested that the government’s announcement actually liberates the profession from seeking its attention or assistance.
Her post comes in the wake of widespread criticism of the proposed introduction of a new category of advisers, “qualified advisers”, one that would encompass workers of banks, insurers, and superannuation funds.
“The government is not in charge of the profession. Not anymore,” Dr Hunt wrote on her LinkedIn profile.
“The profession can now step up and govern itself.”
Highlighting that it is not within the government’s mandate to “babysit each and every profession”, Dr Hunt urged advisers to focus on constructing highly efficient businesses that render the term “qualified adviser” obsolete.
Dr Hunt indicated her support for the notion that the community will benefit from “some advice over no advice” with the re-introduction of product providers into the fold. However, she added that realistically, being afraid of inferior groups of product advisers is illogical.
“We have the experience, the skills, and the mentors around us to differentiate ourselves. To grow. To serve.
“Professionals don’t worry about inferior competitors. They worry about client outcomes.”
In conclusion, she said, the announcement means that “we can once and for all forget the government”.
“They aren’t coming to save us. It is not their job to save us. And most importantly, we do not need to be saved.”
Any action will take time
Benjamin Marshan also extended words of encouragement to advisers via LinkedIn following the government’s announcement.
The former general manager of policy and advocacy at the Financial Planning Association of Australia (FPA), urged the advice community to voice their views on the government’s policy stance via a formal submissions process.
Mr Marshan, who recently concluded a brief tenure at the Council of Australian Life Insurers, expressed the view that the changes proposed last week are unlikely to be implemented in less than two years, more realistically around three years. As such, he urged advisers to remain calm and take proactive measures in response to the developments.
“It’s probably hard to remember given the speed at which the royal commission was implemented – but pre-RC – it used to take years for recommendations of reviews to be implemented,” Mr Marshan wrote.
“You used to have the review (about a year), then a government response (3–6 months), then a consultation (six months after that), then draft legislation (3–6 months after that), then through Parliament (that takes 3–6 months, and you might have a Senate inquiry), to make the law. But that usually has a 12–18-month implementation period because ASIC (or another regulator) has to create guidance and maybe a register (that’ll add an extra 12–18 months).”
According to him, the government’s policy stance appeared to be more of a reaction to the QAR, upholding his view that any substantial action could require a significant amount of time.
“It’s not a consultation paper, it’s not draft legislation, it’s not actual legislation being introduced into Parliament. So will there be a ‘new type of financial advice provider’ or a ‘qualified adviser’?
“Will there be superannuation funds and life insurers and banks providing advice tomorrow? I’d be surprised – and I’d be surprised if it is as easy as just calling someone a ‘qualified adviser’.”
In short, he added: “There’s a long way to go on this one”, “and lots of opportunity to come up with a better title”.
“And if you care – put in a submission – or help your association put theirs in.”
If only…
I’d like to ask WHERE are the life companies advocating for ‘their’ partners, their ADVISERS?! For decades the life companies have spread the icing on thick when it came to telling advisers how “valued” they are, how we are their “partners” in distribution and how [i]their [/i]business relied up on [i]US.[/i] Haven’t times changed! Now, they never mention us, don’t advocate for us, don’t support us in any meaningful way.
If advisers (we the professional accredited fully qualified advisers) meant anything to these life companies then we would get more from them than platitudes and corporate dribble-speak. We would see them [b]advocating for us [/b]regarding [b]risk remuneration[/b] being put back to adviser-centric sustainable levels. We would see them advocating for a [b]ONE year responsibility period for risk business.[/b]
Do they think people don’t notice that they have unceremoniously dropped their once-respected advisers to whom they appeared to love so much? The life companies are in for a [i]VERY [/i]hard time using these new in-house recruits to ‘sell’ their products. Just look at the low level of regular in-house customer service quality being offered to advisers and client right now. It is woeful, especially from the biggest of the life companies. Just imagine placing your future profitability bets on such limited talent, 2-week trained, in-house ‘advisers’ – because THAT’S what they’re saying they’ll be doing!
[b]The life companies will truly rue the day they decided to drop support and advocacy for their ‘real’ fully qualified adviser force.[/b] I think what will surprise almost everyone is the speed with which their downfall will happen. New business will dry up severely and the stat funds will be looking tempting to ‘tide the business over’. It will be much worse than what occurred in the UK – it won’t be pretty. The UK returned quickly to the old ways once the institutions came to their senses and saved the industry by reinstating proper remuneration levels but, sadly, the Aussie game has come too far and caused the loss of too many experienced advisers to ever come back.
The “qualified adviser” term will be changed. If Labor doesn’t, the Liberals will. It’s ridiculously misleading. It will be changed before final legislation is put to Parliament. If the Govt was truly interested in getting out of advice, it would remove the insistence to have all fees via the Annual Fee Renewal Consent Form. Only until that ridiculous red tape is reformed will the advice sector be able to handle the demand that exists.
No matter how you want to look at it, the naming of the new advisers is an absolute joke.
It also says quite a bit about these politicians attitude to current advisers.
I’m absolutely rotten with Jones and the Labor Party regarding this.
Would pay money to see the look on Kenneth Haynes face right now if he were in a room with Stephen Miles. Surely this is a backflip on most of what Hayne was trying to achieve.
I agree, Dr Hunt has a good point. There will still be plenty of work for advisers who can differentiate themselves.
But the term “Qualified” is a misnomer at a minimum, and probably misleading and deceptive at worst. The public will not view the word as it should be understood; as advice from a person who is limited in scope of what they can advise on.
Since when can financial advisors believe anything that comes out of announcements from Ministers in Canberra? If you value your license and your clients who rely on your services, the final arbiter is ASIC. ASIC Regulations that are derived from Financial Laws, and your regulated activities are to be in compliance with Regulations and Financial Laws. Regarding industry associations, when has an industry association ever taken a Case to the Australian Federal Court for a Judge’s decision to uphold the Common Law rights of the clients of financial advisers for procedural justice and distributive fairness to adviser’s experiencing hardship under the Government’s Legislated abuses against financial advisers, eg, Industry Funding Levy? Never … The High Court gave a Common Law rights decision on criminal convicted immigrant detainees.
I agree. I think what “real” advisers have lost sight of is that consumers will always prefer a fully qualified financial adviser, rather than an employee of an institution. To me, the most important thing the government needs to do is address the issue of the current SoA requirements. Then “real” Financial Advisers can provide Simple Advice. Fintechs in the Financial Services Industry are all working to give Financial Advisers the digital tools to provide financial advice more efficiently. This will mean that Financial Advisers can service the market of consumers who want Simple Advice for a fee that is acceptable to the consumer and profitable to the adviser..
But the issue is that employees are being titled, exclusively, Qualified Advisers..
What is a “real” adviser? Most people will take a qualified adviser backed by the product provider all day every day over some individual – just reality?
And you are?
Allowing [b][u]Conflicted Financial Product Advisors[/u][/b] employed by Product Manufacturers to provide Financial Advice, and anointing them as [u][b]Qualified Financial Adviser[/b] [/u]is not only deceptive and misleading, but a total insult to the existing Profession.
This well intentioned democratically elected Socialist Labor Government reminds me of the Ministry of Truth in 1984.
Might have to start drinking synthetic Gin like poor old Winston Smith if they keep this up!
Forget the government, except when the ever-increasing Levy is due, or our mandatory PI premiums, of every time there is an FSCP or AFCA adverse finding, or when there are 4 different reviews that change the goal posts every 12 months. Nonsensical babble pandering to their product-providing payers.
re: profession, govern ourselves?
Whilst ever we’re being “supervised” by a licensee, we ain’t a profession. Let’s not even bother with the “govern ourselves” waffle.
“The former general manager of policy and advocacy at the Financial Planning Association of Australia (FPA), urged the advice community to voice their views on the government’s policy stance via a formal submissions process.” Not funny Mr Marshan, we spent 8 months tirelessly making submissions to the QAR, and these recent announcements is what we get? You expect us to spend more time making more submissions, only for Jones and Levy to be completely ignorant once more and do what they had plans to do from day 1?
“The profession can now step up and govern itself.” Fine, just let Jones, ASIC, AFCA, and Treasury know that they can get rid of the appallingly unfair ASIC & CSLR Levies and heavy handed monitoring, and let us genuinely monitor and govern ourselves.
Aside from the Orwellian “Qualified adviser” the bigger mystery is how a “Best interest duty” can be satisfied by advice given by Employees of product prviders. One would assume that if the spouse of the members Superannuation is part of the the advice then 50% of the time the spouses fund may be a better choice. (Let alone allthe other options available in the market). Will these new adviser recommend the spouses fund over their employers? Michelle Levy reduced the standard to “good advice” for a reason. Lots of water to go under the bridge here…..
Not a question of fear it’s a question of respect and acknowledgement of those who stuck with the profession when others left or were pushed out and eventually enshrined as a profession. To have their profession diluted and undermined by second tier advisers named as though they are bona fide is not on. Call a spade a spade. Not qualified. Stating it will be changed later is further evidence of the pathetic attitude in lieu of advocating the merits of real financial advisers.
Valid feedback and taking offence to specious naming is part of politicking and a positive sign our associations are finally working together at the ridiculous proposal for qualified advisers, instead of getting in bed with fsc and product providers like amp. Ben’s suggestion to keep more submissions coming ignores the merit of the prior hundreds submitted that have been ignored including many he was involved in. These views are not contrarian or insightful, appreciative inquiry tips into naivety and self interest pretty quickly when you look at how these people are paid and history of government undermining advisers. These views do nothing but condone a government who has failed to deliver on their promises to reduce red tape or condescend to actual advisers subject to the most backward and choking regulation in the developed world. The cost of unconflicted advice will rise greatly if this new tier are not subject to the asic levy and will flood afca with vertically integrated sales that real advisers will also need to pay for.