As previously reported, Financial Services Minister Stephen Jones has opted to engage with advisers by attending various Conexus Financial events, which require advisers to pay at least $170 per seat, rather than communicating through his own press team.
According to ifa’s sources, during the most recent breakfast engagement held in Sydney on Monday, Mr Jones informed attendees that the government’s stance on Michelle Levy’s recommendations would not be disclosed until after the May budget.
Speaking to ifa, Emma Johnson, financial services lawyer at Cowell Clarke, expressed disappointment with what Mr Jones had to say.
Namely, Ms Johnson, who was in attendance, said: “It’s deeply disappointing for advisers to have the implementation of the Levy recommendations delayed.”
“And who knows if any will even pass,” Ms Johnson said.
According to her, advisers are not going to see the recommendations on the legislative agenda this year.
“The recommendations, although some tweaking may be required, are on the whole, good for advisers. It provides them with some self-determination and relieves them from regulatory burden,” Ms Johnson said.
“The sheer numbers leaving the industry shows they need these changes,” she added.
Although she does agree with some advisers and groups that have said “tweaks” to the recommendations may be required to ensure adequate consumer protections remain, she believes that “the recommendations are on the whole, solid and have broad industry support”.
“Waiting until post-budget is entirely inappropriate. What will government and Jones know then that they do not know now?” Ms Johnson questioned.
“It’s already clear that government is not going to implement Levy’s recommendation as a whole, so why wait to reveal what’s in, what’s out, and what’s still up for discussion?”
Also in attendance, Peter Bryant, financial services executive and head of business development at Morningstar, told ifa that clarity on the government’s response is needed for industry planning.
“The industry has plenty of issues to focus on in the meantime. That said, the sooner there is clarity regarding the government’s response to the review, the better placed the industry will be to determine any necessary changes to business models and how we might invest for improved customer outcomes,” Mr Bryant said, adding that the Minister told attendees that likely reforms would be known by the end of the year.
Reacting to Mr Jones’ announcement, the Association of Financial Advisers (AFA) said it was not surprised.
“We understand that the Minister has made the point that we will not hear a response from the government until after the budget,” the AFA said in a written statement to ifa.
“We are not surprised by this given that the budget is less than two months away and the Treasury would be very focused upon that in the weeks leading up to the budget being announced.”
As a matter of transparency, it should be noted that Momentum Media’s financial services portfolio was prohibited from attending the most recent Conexus breakfast event. Nonetheless, we believe it is important to inform our readers of the discussions that took place behind closed doors.
ifa has reached out to Minister Jones’ team for comment, but has yet to receive a response.
Delay tactics at it’s finest. Another display of complete incompetence by those who are supposed to be running this shop. Hey Stephen, here’s an idea mate – Why don’t you actually do something to justify your pay package (fully funded by us tax payers) and come visit a couple of Financial Advising offices firsthand, to hear what we and all of our clients have to say about all this.
So once again will the “new Association” step up or will it be the usual radio silence?
It all comes down to how much deregulation the industry super funds will allow. It’s 100% up to them. To what extent will they take their foot off our throat? It appears they can’t agree on that yet and need more time to come to a conclusion. And it’s in their interests to do nothing for as long as possible. All financial adviser representative bodies should be pushing this issue hard now.
The industry funds in general are not ready for advice are they? So he is protecting their public interest.
No wonder so many advisers are leaving our once-great industry. Seriously, what ‘thinking’ adviser concerned for his own sanity and stress levels would stay?
The only decision/s that SJ will make will be in his own political interest.
Off the top of my head I can’t think of a single QAR recommendation that would have any impact on the Federal Budget.
In fact the QAR was all about making advice more affordable for everyday people’s budgets. At 8% inflation, he is certainly not helping to reduce fees by sitting on his hands.
Whilst Levy did a good job unpacking the current problems through a lawyer’s eyes, and suggesting some proposals, her scope didn’t cover the full problem of why advice is unaccessible to most Australians. Before making changes the government also needs to consider:
* Why PI insurance costs are so high for adviseres and what can be done to reduce this. What do PI insurers fear? That’s key! How do we mitigate this?
* AFCA – and the fact their rulings kind-of become ‘case law’ which advisers feel they must comply with. This needs to be acknowledged and addressed and made efficient too. It’s possibly why PI costs are so high.
* Scope. Current AFS legislation, and the QAR review, still only regulate financial PRODUCT advice, not financial planning. Whereas what consumers need, in particular as they approach retirement, is planning that includes things like how much to save and where, when to retire, how much to draw from super without running out later. etc etc. Questions like ‘how much do I need to retire’ and fears about outliving their savings. Product is only a subset of financial advice. Who regulates the rest?
Funny how Jones has remained quiet on his pre-election 10 years with a clean history education promise. You know the one that only needed a sign off.
Do nothing Jones cant make a decision.
Pathetic
Whats the old saying – “fake it until you make it” – he’s got to sound like he knows what he is doing doesn’t he? All of this regulation has gone too far – it would take a real man/woman to say – hey we got it wrong, sorry. But I will not hold my breath.
So is the new AFA/FPA association going to actually do anything about this?
probably another round of talks lacking muscle and softly demanding accountability, what are we paying them for ?
I have always enjoyed throwing $800 away for my AFA membership
Too busy worrying about the design of their new letterhead. Nothing has changed,
It’s because there are a few public holidays between now and then. That was the excuse in January anyway
It’s very clear that Jones is out of his depth and is like a school kid procrastinating finishing an assignment he doesn’t understand. What has he done since he’s been in that position? Seriously? He really is useless.
He has stated in Parliament that it is illegal for a super fund to hold an illiquid asset.
Oops.
Can it get any more stupid.
[b]Advisers told to pay $170 to hear that there is NOTHING to hear from Do Nothing Jonsey. [/b]
What a ridiculously sad joke, utter Govt uselessness continues from Canberra.
Hilarious – bit then again not.