As the path forward for the advice profession remains somewhat uncertain with a new financial services minister on the scene and the next round of Delivering Better Financial Outcomes (DBFO) reforms up in the air, some advisers have been left feeling apprehensive.
However, Financial Services Council (FSC) chief executive Blake Briggs has painted what some might consider a utopian picture for the future, where the collective efforts of financial advisers and super funds help more Australians access crucial advice in a way that is sustainable for the overall sector.
“Wouldn’t it be lovely to get an advice framework that has stability for the next decade, so that advice businesses can have confidence that, when they’re bringing on an adviser, putting them through the professional year, they will get the commercial return for that,” Briggs said on The ifa Show.
“But also allows superannuation funds to have conversations with the vast bulk of their middle membership that is never going to go off and get third-party professional advice but they can get that information assistance from their fund and have a better standard of living in retirement.
“That’s the sweet spot where we can marry up those two objectives.”
Released just before the federal election was called, the half-baked DBFO 1.5, as some have come to call it, led to considerable criticism for former financial services minister Stephen Jones.
Many argued that it delivered little meaningful change for advisers, particularly in regard to advice documentation, while inclusions around institutional advice had alarm bells ringing for the profession and other significant changes, including the best interests duty and new class of advisers, were left off entirely.
The Financial Advice Association Australia (FAAA) was particularly vocal about its disappointment following the legislation’s release, saying in a statement at the time that it was “concerning on many levels”.
Speaking on the matter, FAAA chief executive Sarah Abood said the association “cannot support it without substantial change”.
However, Briggs explained that with the federal election fast approaching, the government wanted to get at least some of the legislation out while holding back the elements that weren’t yet completed, which he said was the “right call”.
While recognising that this decision caused “a bit of skittishness” among the profession, Briggs explained that the legislation is still in need of tweaking to ensure it met the actual intentions of the reforms.
“Jones made it really clear in a discussion I had with him that it was not the intent to allow collective charging for complex retirement advice, for example, but you look at what was put out and it’s not clear that’s been achieved,” he said.
“So, it has brought to light. There will be fine-tuning required in making sure the final legislative design aligns with the policy design and then that can inform the final shape of the remainder of tranche two.
“If you think about what can be collectively charged as the beginning of framing what the new category of adviser or provider can provide information around, then, alright, they’ve already brought to light some of the issues around how they’re going to have to design that. So, it does inform the remainder of that.”
To his understanding, he said, Treasury is actively consulting on the issues raised and those parts left off as it works to finalise the reforms package with hopes that the profession will soon get the chance to review it “in the cold light of day”.
“And that’s where the rubber will really hit the road, and we’re probably looking at over the next three months there, but it will require a bit of pragmatism by every side of this debate,” Briggs said.
To hear more from Blake Briggs, tune in here.
