The long-gestating second tranche of Delivering Better Financial Outcomes (DBFO) reforms are soon to see the light of day, according to Financial Services Minister Stephen Jones, laughing off reports that there are fractures forming in different segments of the industry.
On Tuesday, The Australian Financial Review reported that industry super funds were clashing with retail funds and advice stakeholders over the charging model for the proposed new class of adviser.
Responding to the story on Tuesday afternoon, Jones told reporters at Parliament House he read the article with “some amusement” and that the AFR “wrote a story about what I thought on financial advice without asking me what I thought on financial advice”.
As announced in December last year, the initial design for this new class of advisers would see them prohibited from charging a fee and from receiving a commission; however, the Financial Advice Association Australia (FAAA) has consistently argued this would not provide a level playing field for advice firms.
In June, FAAA chief executive Sarah Abood said the inability to charge for their services would make it almost impossible for advice firms to also employ them.
“Many members have put to us that it is not a level playing field because if a super fund can employ them in the life insurer and a bank and employ them, why can’t I?” Abood said.
“We do have members, particularly those with larger businesses, who are looking at this new class of advice and saying, ‘Well, maybe these are the people I can bring in to talk to the children, the grandchildren of my current clients. Maybe I can appoint a PY candidate as a QA and they can be engaging with clients much earlier than they currently can.’”
However, Jones told ifa that the reforms would “address the advice gap” and receive broad support from industry when they are released in the “coming weeks”.
“The Albanese government’s financial advice reforms will ensure Australians can access safe and affordable financial advice when they need it,” the minister said.
“Our tranche two reforms will be announced in the coming weeks and will address the gap in financial advice left by the former government so that the 5 million Australians at or approaching retirement get the information they need. We have had comprehensive engagement with stakeholders and are confident our approach will receive broad support.”
ifa understands that there have indeed been clashes over the fee structure and that there is a possibility that the draft bill will be another in a long line of contentious financial services reforms, however participants in the consultations being required to sign non-disclosure agreements means there is little detail on how large the conflict could become.
Despite this, on Tuesday afternoon, Jones was even stronger in his stance, saying the draft bill will be out “shortly”, and said he can “guarantee you that we’ll have broad support of industry”.
“The message to the entire industry is this: let’s not get hung up on minor details,” Jones said.
“We are going to bring a bill forward, which is in public interest, which is ensuring that we have safe, reliable, affordable advice, which ensures that the financial advice profession can flourish, which ensures that funds can provide safe and simple information and advice to their members, which deals with the legitimate interests [of] every group, but most importantly and the most important group in all this is everyday Australians who are currently locked out of affordable advice.”
Pushed on the fee issue, Jones hit out at what he called “wild speculation”.
“We will produce a bill, which ensures that we have a wide support of industry, which has consumers at the centre of it, maintains the public interest, undoes a whole of the mess that we inherited from the former government who over nine years did nothing,” he said.
“This is a point, I want to remind you, for nine years, the Coalition presided over a bin fire of public policy, bin fire of public policy. They let the system unroll, saw over 15,000 financial advisers leave the industry without a plan on how to deal with the information gap, without a plan to deal with the financial advice gap and now they have the temerity to say, Labor is going through a collaborative detailed careful process to ensure we get the details right. We will get the details right.”
I have been in this industry off and on for over 30 years I have watched change of governments and ministers come and go they all promise to help the Australian YET NOTHING they do does that. The FOFA was supposed to make advice easier for Australians to undertand then they put lall the forms about ongoing fees, Statements of Advice of 30 pages and so on. This clown talks about safe saying the advice from his industry super mates will be more safe. yeah look at CBUS atm. The only way we can get change is to refuse to pay the levy’s till we get a seat at the table to express our concerns for Australians being led down the path that cheap will provide quality. As those who remember Joh would say “Don’t you worry about that we will look after you”
“guarantee you that we’ll have broad support of industry”
Let me guess, the industry through Mr Jones’ eyes are the Industry super funds and the FAAA, who are trying to walk both sides of the fence.
I wouldn’t be surprised if there is another levy placed on financial advisers to fund the industry fund staff that are providing sales advice.
Yeah you got that right ‘Safe?’ safe from what? Industry funds still not giving advice?
Jones assured it. Thank goodness we can be sure it’s wrong then. Phew!
Vote this useless guy out please.Australia deserves better
Didn’t he say that the accounting changes were well discussed prior to withdrawing them because he had only told his mother about them?
I bet there is a levy in the legislation that professional advisers will have to pay to cover the poor union super funds wage deficit for these so called qualified advisers.
What are the chances the FAAA were one of the NDA signatories?
Almost guaranteed.
Ah yes old mate Jones and his moving lips just another pollie in a long conga line full of broken promises and no actions!
…if only, there was no such thing as a “safe” seat.
Actions are a far better indication of thoughts than words are. There was no need for AFR to waste time listening to more of Jones’ lies. His consistent actions favouring union super funds while slowly destroying professional advice are the best indicator of what he’s really thinking.
Looking forward with ‘some amusement’ to see the cross-bench gain seats at the next election, Maybe then, we will finally get some common sense from the major parties.
Easy to say there’s no disagreement when you only listen to the Industry fund overlords
To quote George Costanza…”it’s not a lie if you believe it”
Jones’ ‘Broad Support’ definition:
1. Industry Funds
2. Unions who get paid and/or subsidised by Industry Funds
3. The ALP who get paid by unions.
4. Canberra-based bureaucrats who lean so far to the left, their left shoulder is touching the ground
5. Choice, which has long been a left-wing lobby group
It was labor government who forced the Hays commission on financial planning industry and made life so hard that planners committed suicides – now blaming it on Coalition for reduced number of advisers. It seems it was the plan to bleed the planners and then allow the big industry super funds to employ vertically aligned product floggers.
Jones has also forgot it was the liberals who initiated the review conducted by Levy. Jones then hijacked it and and pandered to Industry super, all the while increasing costs to financial advisers whilst gaslighting them, saying he was reducing their costs.
You can bet financial advisers won’t see much benefit from this “reform” so it’s better it does not get implemented prior to the next election. Vote the incompetence out!
I am popping the pop corn in anticipation of the comments…….
Me too this show is worth watching!
I want a refund. Seen this movie before. Same bad actor using different spin.
The outrageous ANNUAL Fee Form (Corps Act Act 962F – 962H) has been intentionally inserted into Tranche 1 to increase the unlevel playing field for tied agency Big Super Funds against non-aligned retail advisers. Until the FAAA works to eliminate Corps Act Act 962F – 962H, the QAR changes will fail to substantially solve the retail advice shortfall crisis.
You know how Mr Jones is lying. His lips are moving. All advisers know the next tranche will only look after one group, his union fund mates. The focus will be to give union funds the ability to conflicted and poor quality advice from unqualified internal staff. No more no less.
This is pretty much it.
TOTAL BS