Speaking to ifa on Monday, the lead of the Quality of Advice Review (QAR) Michelle Levy said she feels “somewhat optimistic” having heard the Financial Services Minister’s initial interpretation of her final report.
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 press team.
According to ifa’s sources, during the most recent breakfast engagement held in Sydney on Monday, Mr Jones informed attendees that he would not take any recommendations to cabinet before the May budget, and hinted instead that the likely reforms would be known by the end of the year.
Commenting on what the Minister had to say, Ms Levy told ifa that she was particularly encouraged by his acknowledgement of the need people have for financial advice and that need couldn’t be met by 16,000 financial advisers.
“He also spoke about the fact that [there] are very many overlapping obligations which are preventing people getting good advice. These comments made me feel that he understands the need for the recommendations,” she said.
Ms Levy proposed banks and superannuation funds be allowed to provide simple financial advice to bridge the advice gap. This, however, has been met with heavy criticism by many independent financial advisers.
And while the Minister did acknowledge on Monday that he is seriously considering allowing entities other than relevant providers — professional advisers currently registered as such — to provide advice, Ms Levy said she was disappointed by what was implied.
“I am worried he may introduce them for super funds and not also banks and insurers,” the QAR lead said.
“This I think is because super funds have a duty to act in the best interests of members. I do not think there should be different treatment across them.”
Touching on likely delays in the implementation of her recommendations, Ms Levy warned of the cost.
“The longer we wait for law reform, the more people miss out on financial advice that would assist them. There is a cost to the delay,” she said.
ifa has reached out to Minister Jones’ team for comment on Monday but has yet to receive a response.
Don’t say I did not tell you so. Industry funds will be the winners.
One of the outstanding features in a democracy, is that once elected to power, the winning party will “govern in the interest of all Australians”. What a laugh! Any decisions made in relation to Michelle Levy’s QAR recommendations, will be made viewed only through the lens of what is good for the Labour Party, the Union movement and last but not least – the Union Super funds. All decisions will be made with this in mind – not what’s good for the client or the consumer – and certainly not what’s good for long-suffering Financial Planners. Unfortunately, this applies to both sides of politics – but it it is more egregious on the Labour side.
As far as I can see any financial advice law reform has to be done in conjunction with the Improving Corporations and Financial Services Law. We still have some way to go, and rushing any reforms legislatively is not a good idea.
It’s not a matter of rushing legislation. The concern for most people is. The optics coming from Jones, his tone has changed. No wonder Levy is confused/concerned. My call is, little will change for advisors, Jones already stated that, Best interest is to stay. But allow Super funds some flexibility (read between the lines) . All in all there’s a stitch up coming. But I will be out by then (years to get legislation through) Good luck to you all.
Prior to the election Jones was biting at the bit to tell us all how quickly he would fix the mess.
It’s like a one night stand when they promise to respect you in the morning and then call you but nothing happens.
Easier for funds to provide advice in the name of advice access and cost.
No changes to licensed financial advisers in the name of consumer protection.
That’s my bet.
Very simply, Stephen Jones is awaiting his instructions from further up the chain, their hands full for now, with AUKUS and preparing the May Budget.
What is for sure is that Government faces great budgetary strains. Legislating in favour of consumer choice is unlikely. What is more likely is legislating in favour of favoured sectors, and keeping matters arcane, such as under the guise of consumer ‘protections’ and what not.
All that is needed now is some external financial crisis event, to give urgency to their preferred narrative. Coming in 3, 2, 1….
For all the advisers complaining about yes let’s implement everything now, to those that don’t want to implement anything. Relax. We want this industry to be recognised as a profession. Big changes take time, and we don’t want to rush into another problem. Have you thought about PI insurance with these recommendations. Since early Scotland when insurance first began, insurers have a big say in what happens next for us. That said, I love this industry, and I think we should be seen as the same as doctors, accountants, lawyers and all other professionals. My two cents.
All professions with no SoA and much lower PI premiums often through Professional Bodies. This would go a long way to having a more solid voice and lower cost to cover
Here’s a question for Ms Levy. Are you aware that as recently as 2020, CBA Financial Planning switched off 100% of their adviser service fees. Why? Why did they do that???
Seems like Ms Levy is about to know what it feels like to be a Financial Planner…..we told her that this guy reports directly to Industry Super Funds but she laughed at us. Join the club Michelle.
Super Funds providing Advice will be 10 times worse than any banks providing advice. They won’t know what will hit them.
Stephen Jones should absolutely stop insurers and banks from providing any advice. They simply cannot be trusted. History has proven this time and time again. Let’s not let history repeat itself. I don’t have a problem with the superannuation schemes providing appropriate advice.
I don’t have a problem with the superannuation schemes providing appropriate advice.
What on earth does that mean? Appropriate for whom – they fund increasing and retaining FUM?
You’ve obviously had very little dealings with Super funds. Pretty confident the people working in Banks and insurers telling some “adviser” to hit a target will be working in an Industry Super fund doing the same dance.
Yes. We do of course trust Government legislating increasing amounts of our income (3% to 9% to 12%) to their preferred vehicles, run by Boards filled with favoured appointees, where they will continue to work on the rules of what we can and can’t do with the accumulated balances. That, I trust.
The question everyone is failing to ask- is Stephen Jones even qualified to be the minister for financial services and capable of making these big decisions? His CV has no correlation what so ever to his current role
If you look at this role taken by all of these finance Ministers over all the years one thing stands out, none of them had any idea what they were doing, they are completely out of their depth, which is why the Industry is like a wounded soldier full of bullet holes.
$170 per Adviser to hear nothing is happening, what a bargain :- /
The longer Levy waits the less the banks & life co’s will shuffle her way in hidden commissions for trying to allow them to flog more product via unqualified and unlicensed call centre jockeys.
The costs for the delay is Ms Levy’s insto bonuses………….oh poor Ms Levy.
Not sure why you are having a dig at Michelle Levy. She has done her part pretty well and made obvious the big issues and simple solutions. It’s the politicians that drag their feet, talk the talk but deliver nothing.
The banks should be sidelined.
“Mr Jones informed attendees that he would not take any recommendations to cabinet before the May budget, and hinted instead that the likely reforms would be known by the end of the year”
Sounds like he’s kicking this down the road. He can’t make a decision. So disappointing
There are no decisions required that have budgetary consequences. His excuse is a poor one.
Jones would be wise to sideline banks. He would also be wise to sideline super funds. But as it turns out, Jones is likely to sideline the whole QAR report, and any sort of fixes to the regulatory mess that makes professional advice too complex and expensive for most consumers.
Jones simply doesn’t have the guts or the gumption for any sort of meaningful action. He is full of excuses and delaying tactics. He just wants to do as little as possible, and evade scrutiny. That’s why his industry appearances are restricted to $170 per head ticketed events.
I agree 100% with your assessment. Jones is disappointing.
“The longer we wait for law reform the more people miss out on financial advice that would assist them. There is a cost to the delay,” she said. No such support from any policy bureaucrat about the cost to advice practices from all of the reforms to date.