Speaking at an AIOFP dinner in Sydney on Monday evening, Minister Jones defended the government’s implementation of the Compensation Scheme of Last Resort (CSLR), blaming the burgeoning cost of advice on the dwindling number of advisers operating in the country.
“We’ve got to find the right doorways to get people through and look at post degree qualifications and the professional year and sort all of that stuff out,” Minister Jones said.
He added that the anger being directed at him regarding the CSLR is “fair enough”, but pointed out that the industry funding model is applied “right across corporate Australia”.
“If there are fewer bodies to pass regulatory costs on to, they’re going up,” he said.
“That’s the fact of the matter. So, if you’re looking at why your regulatory fees have doubled over the last four or five years, it’s because the number of advisers who are paying it have halved.”
The CSLR estimate released in March put an additional cost of $1,186 on each adviser for the first full-year period – starting from 1 July 2024 with payment expected in September 2024.
Combined with the ASIC levy of $2,818 per adviser, combined levies will leave advisers out of pocket just over $4,000.
The minister explained, however, that this is just one of the many “bonfires” he is attempting to put out in the sector.
“It’s getting more advisers into the industry, it’s finding a way to spread the costs more fairly across the industry … finding ways that we can fairly deal with those regulatory costs,” Jones said.
“The only sustainable way is to get more advisers and spread the costs right across the industry more fairly. We’re working on that but we’ve got to get the initial bunch of reforms that are either before the Parliament or will be before Parliament sorted out so we can move on to those things.”
Cleaning up the ‘hot mess’
The minister also argued that there aren’t any easy fixes for the “hot mess” and that the government has been attempting to “work on the crises and sort the crises so that we can then deal with the problems”.
“Anybody who comes to you peddling simple solutions, be very, very, very suspicious of them,” Jones said.
“If there’s anything I’ve learned over the last five years of dealing with this area, if there was a simple solution it would have been put in place, and short-term bandaids are not sustainable. We’ve got to get sustainable solutions to these issues and I’m committed to doing that and I’ve got the support of my government to see these things through.
“We’ve got a bunch of reforms, two waves of reforms to advice and yeah, it’s about you, but mostly, it’s about the people you serve and the people you want to serve and the people who will never come and see a financial adviser but need reliable information and having a safe door for them to walk through. That’s what it’s all about. Hopefully we can get more pathways to the profession through doing that.”
Reiterating the government’s commitment, Jones said he has the support of his “cabinet colleagues and caucus”.
“I have their support because I have won them on the idea that even if you don’t support the [deregulation] stuff, which I do, this is a fight between scammers on the one hand who are ripping the best part $1.5 billion a year off people because they can’t get decent advice,” he said.
“And people who are qualified or competent to give information or advice to support them, whether it’s you, your staff, other licensees, or people that are appropriately trained to give more basic advice through a fund structure. People have bought that and understand the importance of it, we’ve just got to get on and do it.”
Jones also implored financial advisers to support the government’s advice reforms and “judge us by the announcements we’ve made and the work we’re trying to get through Parliament”.
“If you believe in it, get behind us, focus on the main game,” he said.
“There is going to be lots of dust thrown up over the course of the next year, but focus on the main game because we need people to support us in that project.”
The only thing I know with certainty is that my fees are rising by 16.9% on 1 July 2024.
Due inflation, ASIC fees, CSLR, anticipated INCREASED red tape, etc, etc.
The Government and regulatory bodies will be getting the blame.
I know there are limits to fee increases, however, in the short term, this is what I am forced to do.
Seriously?
This man and his cronies are a laughing stock! Not one word that comes out of his mouth can be trusted as being in the best interest of the profession/industry.
The fact that he admits scammers are ripping people off is in no way related to the acts of licensed advisers, yet we’re being left to carry the can financially.
Add the BS that has been rolled out since the RC; think increased compliance requirements (FDS), additional fees (ASIC levies and CSLR), and PI costs effectively doubling (without a claim) most planners cost of business has increased dramatically. Oh, and the uncertainty re education requirements…let’s not go there. Or the introduction of the term “qualified” adviser to describe people who would not even hold qualifications…sigh!
Then, if we consider the fact the reputation of the profession is constantly being blackened by actions of non-licensed “advisers”, not to mention the property promoters telling people to “buy property in your super” (again unlicensed people) there’s really no differentiation in the eyes of the consumer between an ASIC licensed adviser and the scammers.
Effectively there is no protection for the remaining cohort of skilled, ASIC licensed advisers.
Who in their right mind would want to continue to operate in such an uncertain and constantly changing environment? After 25 years I’m preparing for my exit in the next 3-5 years.
Jones, Albo and co will not be getting my vote.
Hello it was Jane Hume a liberal senator who created this mess.
The guy is a liar and a snake in the grass. The AIOFP sold it’s sole for a Dinner Guest.
Dec 2023 Qualified Adviser term,
January 2024 Registration requirements with a fee from 2025.
February mandatory breach reporting.
March Adviser levy up 147%.
March ATO removes GST input credits on Advice fees from July.
March- CSLR- Advisers bare the brunt of product failures, Super funds off the hook.
April Treasury allows Qualified Advisers to slide through with a 3 day Tafe Course whilst Unqualified its Masters and Grad Dip.
April- Consolidation of Fee consent forms off the table.
Good summary for the YTD.
You simply cant pile any more BS into Jones’ trailer….it is full and overflowing now.
If he had another trailer, he would fill that up in 5 mins.
“We’ve got a bunch of reforms, two waves of reforms to advice and yeah, it’s about you, but mostly, it’s about the people you serve and the people you want to serve and the people who will never come and see a financial adviser but need reliable information and having a safe door for them to walk through. That’s what it’s all about. Hopefully we can get more pathways to the profession through doing that.”
Reading between the lines and deciphering Jones meaning behind his words, his focus is clearly on the ISF’s and bringing in the ‘qualified advisers’. He has no desire to reform Professional Advice regulation one bit.
Not sure one needs to read between the lines – it is clear as day – but I’m sure there remain a few true believes that being a Profession is the answer to all problems – and the answer seems to be delivery from ISA? Who would have guessed that?
According to the FAAA and others, the legislation before Parliament will INCREASE the compliance costs for advisers, not reduce them. Since he didn’t make any comment on this, one can only assume he will be pushing ahead with it. These politicians grossly underestimate the influence financial advisers have with the voting public. Labor benefited from the anger financial advisers felt toward the Coalition last time around. That goodwill is quickly evaporating.
Yes – your compliance costs WILL INCREASE.
Jones’ QAR reforms will increase the red tape for financial advisers. The legislation requires super funds and platforms to audit SOA’s and ROA’s to make sure advice is appropriate and relates to the fund. The work this will create will be enormous. He has lost the plot
Which means less real advisers and soaring costs meaning no funding for new entrants. Buffoon
“If there’s anything I’ve learned over the last five years of dealing with this area, if there was a simple solution it would have been put in place”
5 years he’s been at it and he hasn’t done anything.
He says he wants to build the advice industry but then introduces the unqualified, conflicted advice model for product providers and no respite for the real qualified advisers. His actions are inverse to his words.
If you want to build the advice industry, then take away the cumbersome compliance, allow advisers to serve more people and let business models evolve to facilitate that, the industry will become more attractive and new entrants will enter.
Winter is coming Mr Jones, and many will not expect you nor Labor to last….
He should have really said, “Is there anything I’ve learned over the last five years?”
and after 5 ears can’t draft a bill without a wholesale error that would’ve killed general insurance. But simultaneously ignores all practitioner feedback and wont even publish it so the public can see the support he has ignored.
Please tell me when to stop laughing. Jones wants advisers not to peddle simple solutions yet he wants industry funds employees peddling their super fund to known as Qualified Financial Advisers! I don’t believe a word that comes out of this guys mouth. He’s a joke.
……now
He added that the anger being directed at him regarding the CSLR is “fair enough”, but pointed out that the industry funding model is applied “right across corporate Australia”.
LIES, LIES & MORE LIES from Jonesy.
MIS (Managed Investment Schemes) such as the dodgy DIXON’s MIS Fiasco have NOT contributed a single Cent to CSLR because Canberra is Currupt and paid off by Institutions that own most MIS.
The banks, at their worst, were still more client focused than Jones is now.
Can someone remind Mr Jones about his comments in his interview with AFR on June 3 2022. In it he states “he will prioritise easing the regulatory burden on financial advisers within three months”. Further he says “Let’s fix the hot mess now, so we don’t have more people exiting the industry and so people aren’t jumping through crazy hoops”. He was indicating it was a simple solution close to 2 years ago. So Mr Jones should voters have been suspicious of you then when making these claims or suspicious of you know when you are being held accountable for delivering next to nothing on your promises?
Lots of big talk coming into the election. Now the ball is in his court to stand up and take real action he is full of excuses. The fix is simple. Everyone is pointing to the need to roll back regulation overreach. It could be fixed tomorrow. No more best interest duty, no more safety harbor steps, no more annual fee renewals, no more SOAs as a start. Yet Mr Jones big idea is to get more advisers, how? Unless something is done about poor regulation and the anti adviser stance taken by treasury, ASIC, APRA, union funds, Choice etc there will be no additional true advisers. Fix the regulation and they will come.
Jones is full of BS can’t understand why AIOFP even bother to give him a platform to continue peddling lies to us. Better off have him sit listening to us not the other way around. His words are cheap and he is not a man of action.
It is interesting to note that there are 90,000 practicing lawyers (Commissioner Hayne being one of them), compared to only 15,000 financial advisers. It is also interesting that lawyer Hayne’s recommendation to impose ANNUAL Fee Renewal Consent Forms (that do not exist in any other nation on earth except Australia) has resulted in millions of consumers becoming unable to access cost affordable advice. Until AFRC Forms are gone, NOTHING will improve for consumers seeking advice.
“If there are fewer bodies to pass regulatory costs on to, they’re going up,” he said.
This can easily be fixed by Jones and the Govt. and Jones knows this.
Goodbye Jones, goodbye Albo.