Speaking on the latest episode of the ifa Show, shadow treasurer Angus Taylor expressed concerns around the Labor government’s handling of the Quality of Advice Review (QAR) recommendations and the subsequent roll out of the Delivering Better Financial Outcomes reforms.
“Well, it probably wouldn’t surprise you that I am deeply concerned about where it’s at. I’m deeply concerned about the loss of the number of advisers. We’re about half of where we were, and that’s having a big impact,” he said.
Taylor said he saw Michelle Levy’s recommendations as an opportunity to improve the advice industry and Australians’ access to it, however, the government’s response has fallen short and created further confusion and driven the cost up.
“We’ve got many Australians that are under-advised now, and we want to get this sector really firing again. I saw Levy as a chance to do that,” he said.
“It was, I think, a good report. You might not agree with all of it, but I think it was absolutely heading in the right direction, and we wanted it implemented in full as quickly as possible.”
Taylor insinuated that the government has been motivated to implement changes that benefit super funds while intentionally dragging their feet on other matters, all the while causing further issues within the industry.
“What Labor has done is made the call to do it very selectively. So, some areas, which are generally the areas kindest to industry super funds, they’ve done quickly. And other areas, they’ve been much less inclined to go,” he said.
“They’ve made changes; the qualified adviser piece, which is causing a lot of confusion and problems. There has been drafting errors along the way. And I think the result of it is it’s not giving the clarity to the industry it needs to re-establish itself. That is not the way to do it.”
Further criticising the government’s handling of financial advice, Taylor added: “We’ve got to get this sector really moving again. We think there was a good pathway, and sadly, that’s not what’s happening.”
Acknowledging past mishandling
Taylor acknowledged the challenges advisers have and continue to go through due to the mishandling of the industry and the role the previous Coalition government had in creating and exacerbating some of the challenges.
“I’ve heard it many, many times and I think it’s well-placed grief because, as I say, the sector had to go through a period of some cleansing of some bad behaviour that had happened in the past,” he said.
“The truth was, there was some egregious behaviour going back.”
Noting the misconduct within the advice industry prior to the royal commission, Taylor said now is the time to look forward and enact change for the industry.
“The majority of people were behaving well and advising incredibly professionally. Some bad eggs in industries can have some adverse circumstances and they clearly did. But the job now is to look ahead and see what’s needed,” he added.
“And that does mean scrolling back some of the madness? I mean, I’m pleased that there are some parts that Labor is committed to. Some of the paperwork and bureaucracy that has been there just got completely out of control.
“And we are seeing some movement on that, but we need a lot more. And I’m gonna keep advocating for it. I make no apology for that.”
16,000 financial advisers today may be less than one quarter what the numbers were before the 2008 Global Financial Crisis. If Politicians asked the Government Actuary to calculate the number of advisers needed for financial advice efficacy in the Australian population, the demographic may be 10,000 advisers per 10 million population. This may suggest that Australian society needs 260,000 independent advisers for productive efficacy. An obvious failing was the loss of around $300 million a year to Internet scammers. If those Australians had a licensed financial advisers-relevant provider, they would have picked up the phone and asked their adviser before they did the scam transactions. Therefore, it appears that scammer profited from Politician’s dearth in adviser levies, CSLR levies from July 2024 and Delivering Better Financial Outcomes reforms, which will require advisers to prove costs to super Trustees. All we have to do is post a copy of our 29 January 2024 ASIC invoices financial adviser levy to super Trustees. Mine was $33,500 and $16,400 which will need to be passed onto clients and increase their Ongoing Adviser Services fees. It’s Politicians’ myopic madness … we have to justify ASIC’s levies to super fund trustees, doesn’t the left hand know what the right hand is doing?
Stop talking stop complaining on both sides and help objective non aligned advisers do their job and help Australians fairly. If not there will be no profession. Every other developed country in the world does it better. If you spruik support and carve out vertical integration and compliance carve outs for super funds, or banks, or insurers, or single fund managers you will continue to see poor consumer outcomes and bias behavior.
But what do both sides of government do? Tax them, litigate them, Demonize them when the sector accounts for less than 3% of afca complaints but funds 90% of the cslor. Just stop talking and actually do something, anything, to improve the choking red tape and extra taxes for advisers simply trying to help their clients with an optimum solution, and not just fold product (which both sides of parliament have previously condemned in worthless words but supported in action).
It’s an international disgrace, and a uniquely Australian one. Disgusting
“If not there will be no profession”
I suspect this might actually be the goal.
Do you have any reason to believe “both sides of Govt” will stop? Both sides continue too through out a promise here and there for those still for whatever reason choose to believe – but reality always seems different to the promises made by a Politician.
“I’m deeply concerned about the loss of the number of advisers.”
You might be concerned now Gus, BUT where were you in the last 10 years. Remember your Coalition mates introduced LIF and FASEA, one of which were funded by the big banks and both benefited the big banks in their endeavours to eliminate self-employed advisers.
And yes, Mr Jones is openly favouring the big industry superfunds. Not good!. But then the Coalition favoured the big banks. Equally not good! And most of the complaints evidenced at the Hayne Royal Commission were about bank advisers and we’ve yet to see any prosecutions of bank executives who over looked those practices.
But your mates the banks have departed financial advice, leaving us with another one of your time bombs, the ASIC levy. Advisers became, under your mob, litigation funders to ASIC, and ASIC are having a ball taking cases the court that they ought to know that they have a small chance of winning. Try ASIC v Zürich FCA 1641 and watch Justice Jackman blast the ASIC case out out-of-court, baby and bathwater
“I’ve heard it many, many times and I think it’s well-placed grief because, as I say, the sector had to go through a period of some cleansing of some bad behaviour that had happened in the past,” he said.
Now this one really bothers me because it mirrors what was said by senior ASIC executive at a meeting last week. Where is the evidence for this outrageous statement. Remember Melissa Caddick was unlicensed, yet advisers had complained to ASIC for a number of years about her activities. ASIC were asleep at the wheel, and probably didn’t even have their hands on the wheel.
What we need from the Coalition right now is to wind up the attacks on Mr Jones along the lines of the attacks the Coalition makes on the Minister for immigration. We want our debate out in the open, not restrained to the back rooms and the occasional mention on a Parliamentary committee.
“The truth was, there was some egregious behaviour going back.”
Seems Pollies and ASIC still blame the RC FFNS scandal on Advisers.
Real Advisers are the easiest and go to all the time to blame everything.
Yet a huge part of the Big Banks FFNS was orphan clients that DID NOT HAVE an Adviser. Yet the Big Bank Managers allowed the ongoing FFNS.
ASIC knew for a decade of the FFNS and did Nothing.
As for the Big Banks AFSL Responsible Managers, Adviser Managers, Executives, CEO’s etc not 1 single person busted, fined, banned, etc.
Canberra is corrupted by Donation paying Institutions and Industry Super Funds.
Anyone who’s been around a while knows precisely what the problem – and the ultimate resolution – is, to this and every other compliance matter: ASIC (especially ASIC!) and politicians and the other hangers-on, get out of it! Laissez-nous faire! Leave it to the profession to go about its business. Common sense will then prevail. Advisers are qualified, aren’t they?
Angus, tell me, what did you and Josh-from-accounts do about this mess?
I readily accept that Mr Jones has ditched us (advisers)… but, it’s a bit much you bleating, don’t you think?
A cynical observer would suggest that Labor’s objective in this was to assist industry funds in moving into the advice space, given it’s about the only change they’ve implemented post the QAR report release.
This is accurate not cynical
Yep. 100% agree.
Taylor’s side of politics can start showing a genuine commitment to advisers by dumping Jane Hume. She used to work for Australian Super and QAR is her fault.
I suspect Liberal Party Core values are closer to Jane Hume and her previous employment role than we might think – there is seriously very little evidence to suggest otherwise?