Jones says he just needed ‘6 more months’ to finish off advice reforms

It will be cold comfort to advisers following a slow rollout of legislative reform over the last three years, but retiring (from politics) Financial Services Minister Stephen Jones thinks another six months in the job and the “project” would be finished.

Speaking at Momentum Media’s Election 2025 event on Thursday morning, Jones argued that if Australia had four-year terms, the Delivering Better Financial Outcomes (DBFO) package would have gotten over the line.

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“I’m a big fan of four-year electoral terms,” he said, responding to a question on whether advice reform was a bigger task than he expected before taking over as minister in 2022.

“I think six more months, actually, we’d have this particular project and a couple more completed.”

The answer is in stark contrast to the speed with which legislation has progressed up to this point, with the protracted timeline for the government to implement the recommendations of the Quality of Advice Review (QAR) becoming the subject of a rolling clock for the opposition since the middle of last year.

During a Senate estimates hearing in November last year, Senator Andrew Bragg questioned Treasury on the slow rollout of not just the next stage of DBFO legislation, but also a range of other measures within the broader financial services portfolio.

However, the outgoing minister was resolute that it wouldn’t have even taken the rest of a four-year term to finish things off.

“No government is likely to control the Senate in the next Parliament, but it’s absolutely the case that a four-year term, for lots of reasons, just makes sense in this country,” Jones added.

“Particularly when there’s a change in government, there’s a lot of necessary disruption in the first year, it’s usually years two and three that you hit your straps.

“I envisage that this project could have been completed in another six months and will be. I think we we’ve moved the reform dial significantly.”

This also formed part of his thinking in delivering an incomplete version of the draft legislation before the election rather than nothing at all, though he did express “disappointment” that he hasn’t seen the reforms through to their completion.

“You know the consumer harm that has been experienced from the current financial advice laws, and you know the benefit of getting this right,” Jones said.

“So, I express my disappointment that we haven’t been able to get this through Parliament in this term, but we have made significant headway. We have done an extensive consultation with industry on all the policy design settings. Many in the room have been deeply involved in those consultations and I thank you for it.

“I did ensure that before we went into caretaker period, we had a substantial piece of the draft legislation out for consultation.”

Work on the final portions of the legislation – namely modernisation of the best interests duty, removal of the safe harbour, and introducing a new class of adviser (NCA) – is “underway at the moment”.

“I wanted to maintain momentum and show good faith but also ensure whoever receives a brief from Treasury at the other side of the election, they have something on their desk which is pretty final, so that one of the first acts that a new minister can make is taking the final steps of legislating these reforms,” Jones told the adviser audience.

“Having done the hard work of policy determination in consultation with you, the draft legislation, getting your feedback to ensuring that we’ve got the details right, ensuring that the legislation matches the announcements and policies that we’ve been dealing with you on, getting that technical detail right so that the new minister has the ability to do the easier stuff, which is ensuring that it gets legislated and getting the laws through Parliament.”

‘In my view, that’s the wrong answer’

Minister Jones also pushed the importance of expanding access to financial advice for Australian retirees – even if that means not all of them see a professional adviser.

Given that, according to Jones, one in five Australians will be over the age of 65 by January 2026, the imperative of providing advice is greater than ever.

“They are retiring and they need information and advice on how to do that. And they’ve got some big decisions to make,” he said.

“The number is about 5 million. So, 5 million into 16,000 just does not add up. One answer might be to say, ‘Well, unless you can get in to see a proper professional financial adviser on your own’. In my view, that’s the wrong answer.

“We need to ensure that access the information and advice which is relevant to them, and ensure that we are designing a system that meets the world we are living in, not a perfect imagined world that we are not living in.

“Even if we tripled the number of financial advisers, professional financial advisers, each and every year over the next three years, which we cannot – it’s physically impossible to do – we would not meet that number.”

That means more avenues need to be opened up, he added, including more “gateways” for people to access professional advice, but also through NCAs.

“The need for us to have more pathways for people to get access to safe, reliable advice specific to their needs. The new class of adviser is designed to deal with that issue,” Jones said.

“Plenty of detail out on the policy objective in relation to that, more work to be done around the legislation, which will be worked on in the next few months.”

While he wanted to “refrain from giving advice to my successor”, Jones did add that deep engagement with the sector makes a difference.

“We’ve done that deep engagement, never assuming that you’ve got all the details right. Having a very clear idea of what the objectives are, and never moving away from that objective,” he said.

“You might move on the pathway, but never move away from the objective. I’ve stated pretty clearly what I think the objective needs to be, and that is the public interest.”