Speaking on ABC Radio Brisbane on Tuesday, Financial Services Minister Stephen Jones said there aren’t enough financial advisers to give the right kind of advice.
“I’m looking at this and I’m working out how can we get more advisers into the industry, but also how can we get more information and advice?
“So I’m looking at superannuation funds as a likely candidate,” Mr Jones said.
He elaborated that Australians should be able to pick up the phone and ring up their fund to ask for simple advice such as whether they have enough super for retirement, and how that interacts with their pension.
“And the funds, because of the laws we’ve got at the moment, say, ‘Sorry, we can’t answer those questions. You’ll have to go to an adviser’, and the adviser will say to them, ‘Sorry, my books are full. I can’t help with you that information’,” Mr Jones said.
He explained that currently, the average super balance that Australians are retiring with is $200,000.
“Obviously, when you pick an average, there will be a lot of people with a lot of more and a lot of people with a lot less and we’re trying to get that number up so people can have dignified retirement. And 1 July, people’s superannuation clicked over to 11 per cent, so that’s good — sorry, 10.5 per cent. That’s a good thing. And it will move to 12 per cent between now and 2025. Every year, it will click up an extra half a per cent. Two-hundred thousand dollars is good but even $200,000, you’re going to have a retirement with a blended income of pension and private savings, so therein lies some complexity with the tax system as well, and what about if your partner is still working or if you’ve got a residual mortgage that you have got to pay off?
“So people need some basic info and advice. I’d rather they got it from someone who knew what they were talking about than going to TikTok or Instagram,” the minister said.
Mr Jones blamed “layer after layer” of “well-meaning regulation” for “protecting consumers from good advice”.
“There’s just not enough people and not enough avenues to get the advice, and that’s what my job is to fix,” he said.
Asked to elaborate on how he intends to “fix” these issues, Mr Jones shared his three-step plan.
“So, I’ve got three jobs of work going on at the moment. The first is about red tape reduction, removing all the obstacles that don’t provide any consumer protection but do make it harder for a licensed financial provider to provide information and advice to consumers. Hopefully, that will enable advisers to bring more customers in but also reduce the prices,” he said.
“A second job of work is looking at how can we safely provide an environment where superannuation funds can provide information to their members. They stopped doing it in large part because of the reforms put in place over the last decade. We do have to ensure that we’re managing for conflicts of interest. So, don’t want to see a situation where someone is getting a commission for providing advice to somebody to buy a product from a superannuation fund that they work for. So, we’ve got to work through all of those conflicts to ensure that information and advice are being given by a fund that’s absolutely in the interests of the person who’s receiving it. And that’s what I’m dealing with the profession and with superannuation funds and with regulators and consumer groups through at the moment,” Mr Jones added.
His objective is “ensuring that people can make good decisions because they have good information”.
Mr Jones also highlighted that he doesn’t want Australians turning to Instagram influencers who have “no license, have no knowledge, have no qualifications, and are providing broad and sometimes dangerous information to people”.
His view of influencers stands in contrast to what former financial services minister Jane Hume used to propagate. Namely, her view was that influencers are just the latest iteration in a long line of consumers sharing views about financial markets, not unlike “taxi drivers giving stock tips”.
Had a new prospect show me application forms yesterday from Australian Super which he was emailed for an account based pension despite not being eligible to open one. He told them a bit about his situation but they never asked the right questions to understand properly. We definitely need more of this crap happening from unqualified phone staff.
Vertical integration, banks, sales models etc were the past main causes and who to say the future causes may still be vertical integration from the industry and super funds giving advice, or from the lower educated or experienced depending on what is approved.
The restricted term “Financial Planner etc” was brought in for the primary object was to restrict this to those authorised to provide financial advice and be listed on the ASIC register and also for consumer protection.
QAR and Minister Jones is now allowing Super funds etc will be able to provide scoped, scaled, or limited advice. If they meet the criteria above, then they will be able to use the restricted term as well.
The restriction of the term should only be for those that are on the ASIC register and fully meet the Fasea education standards. Otherwise, we are back to the handout of CFPs again from past times where no one can tell the difference especially the very people where the protection is needed being the consumers.
For those that don’t meet the Fasea education and thereby not being able to use the restricted term but are on the ASIC register, then there needs to be a term for them. This is like Lawyer and Conveyancer.
Why not have a secondary term like “Associate” or “intermediate” or “Affiliate” as a prefix or postfix to Financial Planner/adviser.
If there is a planning group created that will be factored around the experience pathway, then they should not be allowed to use the restricted terms.
Otherwise, it will all end up like the CFP again where we can claim the same level, but the disparity is confusing and wide.
And when there is an issue, we will be grouped as “financial planners”.
“And 1 July, people’s superannuation clicked over to 11 per cent, so that’s good – sorry, 10.5 per cent.” – surely this comment reflects the good Ministers grasp on what is, his portfolio!!
Legislate remove the choking red tape
And 1 July, people’s superannuation clicked over to 11 per cent, so that’s good – sorry, 10.5 per cent. Doesn’t even know his figures.
And it’s 11 so he still got it wrong
Re the reduction in red tape – when is this happening ?????????? Right, back to my RoA for intra-fund advice !
Industry super funds I am ready, willing and able to work for you as a former adviser so just let me know when, where and how much you will pay me to give good advice to your customers. Thanks to Minister Jones for the opportunity.
Maybe we should all go to the pharma companies for health advice
Wonderful news. About time we had a strong politician that makes a difference to our lives. Jones you are fantastic. Keep doing great things. I’m so happy you came along. Seems like a lot of whiners on here. Never happy. Millions of people will secure advice on your watch. Top of the day to you Sir.
Rubbish sales advice not financial advice.
Why are you bitter? Industry super funds are always top performers.
Big mistake Jones. I would not do it…
After sitting on AwareSuper’s phone line for an hour and being told incorrect information yet again, I think what possibly could go wrong ?
At least you got through, we haven’t been able to access their “adviser line” for about 2 months, nor their “new adviser portals” because “it doesn’t work on chrome” (why would it….. LOL). Likewise, we are currently nearly 6 weeks into a basic withdrawal request for an AustralianSuper client which was needed to a re-cont prior to June 30th. Reason for delay? None given. DESPITE daily calls and requests to escalate, we have been refused information, refused ability to speak even to team leader and told if we’re unhappy, lodge a formal complaint with AFCA (because they know this gives them 45 days). And we are the listed adviser for this client. Industry funds are a joke, their service is a joke. The fears advisers have are already so obvious.
Over recent years a lot of the union funds have set up adviser phone lines and adviser portals. But they either don’t work, or have an impossible registration process. I suspect they are purely for show, and the deeply entrenched union super behaviour of putting as many obstacles in the way of advisers as possible, is still very much the norm.
Most advisers would be happy to keep their clients in union funds, if they made it easy for advisers to access the client’s information and support them with advice. But as long as union funds continue making it difficult, that will be a compelling reason to switch fund. There are now plenty of retail super funds that provide similar performance and fees, with much better client and adviser service.
Oh what utter nonsense. The industry bodies who support this are complicit in the demise of Financial Planning.
Talk about vertical integration, AMP the sacrificial lamb and now the Labor party creates its own vertical integrated business from end to end.
Labor Party + Unions + Industry Funds = golden river of cashflow flowing in each others coffers.
Well done Jones – you will be rewarded richly.
Sadly the financial planning industry buys your tripe.
The likelihood of introducing low capability people to give advice to super fund members because we have lowered the standards required of people who can provide advice simply because they are employed by a super fund producing a better informed consumer is fanciful at best. Where do they dream this stuff up?
“The banks and superfunds are doing the wrong thing we need them to stop providing advice”, “ah there is a lack of advice, you know what maybe we need the banks and the superfunds to fill that gap, why hasn’t anyone thought of that before?” – Seriously are these ministers new to the game or is there just too much money being flung their way by the industry superfunds that they are happy to bring them back?
There is no advice gap ; it’s a furphy.
Jones just wants his union mates to dominate advice .
You’ll have to go to an adviser”, and the adviser will say to them, “Sorry, my books are full. I can’t help with you that information”,” Mr Jones said. Complete fabrication Stephen Jones. If you bothered to get rid of all of the red tape in the first instance, advice practices could easily scale up.
Mr Jones…how can you tell people how much they will need for retirement when the super funds don’t know how much annual income their policy holders require per annum in retirement. Too many people have been given wrong information by product providers in the past on retirement funding, leaving people with insufficient retirement funding and/or to repay debt prior to retirement.