Speaking on a Financial Services Council (FSC) post-budget briefing on Thursday morning, Financial Services Minister Stephen Jones responded to concerns that the first Quality of Advice Review (QAR) bill would result in super fund trustees being required to review every statement of advice (SOA) before it can charge the cost of advice against a member’s interest in the fund.
“What we’re trying to do here is clarify the law to affirm the status quo, because the status quo was put into question as a result of Michelle Levy’s review and she put a spotlight on what she thought was the deficiency within the law to support status quo practice,” Jones said.
“What we are attempting to do is to affirm status quo practice, not to change it but to affirm status quo practice.
“So, where funds have arrangements with advisers for the payment of advice fees in relation to retirement income, we want to ensure that status quo is maintained and supported by the law. We’re not trying to upset the law, not trying to change any existing practice.
“How exactly do they do that? That’s where we’ve come to the situation where some of the funds are asking for copies of SOAs and you guys have got to go through and redact personal information that you don’t think should end up with a trustee.”
He added that there is an immense amount of work that needs to be done in the advice space and not a lot of parliamentary sitting days to get it done before May next year.
“I want to get this done – all of the pieces. I want to get to the big work that will make a significant difference, [which] is the next tranche of work and I want to focus love and attention on that,” Jones said.
“I saw this was something that should have been [non-controversial] and working our way through it. That’s not to diminish the issues that you’ve raised, but I really do want to impress the pressure that we have upon us about delivering the big piece and getting that through before May next year.”
The minister also noted that the government believes it has “got it right”, but it is important to “draw the regulator into this conversation as well”.
Read the FINE PRINT
The words “payment of advice fees in relation to retirement income” give trustees the discretion to dissect the adviser invoice. So for example if the total invoice is $4000, but the retirement income component is $2500, then it would appear the trustee will be paying the adviser only $2,500.
It would appear that any invoice without sufficient detail might bounce back
Seeing we are here, where is the close examination of the millions and millions of dollars of member money going out the door being spent by super fund trustees?
Jones doesn’t mind a bit of Status Quo.
He’ll give the Industry Funds ” Whatever You Want” whilst forcing the Financial Advisers ” Down Down”.
Another interpretation is he doesn’t understand a calendar and is now worried he won’t be able to legislate the free pass for unlicensed crap advice for employees with no code of conduct or experience or education to “advise” on Australians hundreds of billions of retirement savings. In a vertically integrated sales manner only focused on locking people into industry funds. Poor simple bias jones
Agree. This is exactly what it feels like.
Prediction – scope of new “product provider” advice will be incredibly broad but described as simple.
Mr Jones, thankyou for working slowly towards the quick wins. Anyone willing to take a bet that the legisltation won’t be introduced before the next election?
I hope it’s not, so it probably will be, as it contains the backward “qualified advisers” for industry funds only. Absolutely pathetic and despicable
affirm status quo = check every advisers SoA and no regulatory relief.
He’s running out of time to get the legislation though regarding qualified advisers for Industry Super, if Labor get voted out next year. Maybe the Liberals will latch on to this and say they will reject all these proposals.
That’s about as clear as mud.
Jones out, Labor out.
What Jones is trying to say is he needs to pass Qualified Adviser legislation asap and doesnt care or intend on altering red take and choking compliance which is killing the profession for advisers who want to help their clients with more than using 1 super fund. Disgusting disgrace, and the most damagingly stupid Financial Services Minister ever – WHICH IS SAYING SOMETHING!
Prediction: retail clients will be dumped in favour of wholesale clients. Wholesale category will be lifted to $10m to make life even more difficult for us.
Looks like someone’s media adviser has told them to use the phrase “status quo” repeatedly, this will help assure people that the government is not responsible for any changes.
“So, where funds have arrangements with advisers for the payment of advice fees in relation to retirement income, we want to ensure that status quo is maintained and supported by the law. We’re not trying to upset the law, not trying to change any existing practice.
What is Jones saying here? Is it yes, trustee do (And should have always) checked adviser SOA’S to pay an advice fee?
Mr Jones is either lying or incompetent. Sadly from his complete mismanagement or the whole QAR process it is probably both.
More spin….no action!! The “hot mess” continues…just getting more difficult for advisers!!