Speaking to Stockspot chief executive and founder, Chris Brycki, financial services minister, Jane Hume, said that while the last two decades have been tumultuous for the advice industry, “the worst is over, and the industry has settled in”.
“In the last twenty years, and particularly the last decade, we have seen a massive shift from that sales profession, that sales mentality, through to it becoming a proper profession, rather than a sales job, a proper profession, where the interests of the client come before the interest of the adviser,” Ms Hume said.
“Now that has been a really uncomfortable shift for a lot of people, so we kind of knew that people were going to leave the industry if they didn’t want to come along on that journey.”
Ms Hume explained that on top of these fundamental changes which have seen the compliance component of advice become “more and more onerous”, the digital disruption has posed further challenges.
But, she explained, digital solutions now offer the opportunity to bridge the advice gap by facilitating cheaper advice for people who need limited guidance.
“Not everybody needs a full financial plan on day one, sometimes they just need bite-sized pieces of advice on the way through and certainly digital advice can fill that void,” Ms Hume said.
“Digital solutions can rally help reduce the compliance burden for traditional advisers that reduces the cost of a financial plan.”
According to the Senator, digital advice does not pose a threat to traditional advisers.
“This is a digital solution for those people that might not necessarily need the full advice. So, it’s about making sure more people have access to advice. It’s not about eating into a traditional adviser’s client base. It’s about allowing that traditional adviser’s client base access to cheaper advice,” she explained.
Hume defends finfluencers
Asked about financial influencers (finfluencers), Ms Hume reiterated her now infamous view of free financial advice and applauded the subsequently higher engagement of young people with their personal finances.
“ASIC have come down really hard on finfluencers. They’re leaning towards the more cautious side saying that this is financial advice, particularly if they accept commissions or any sort of gain for promoting a particular product or service and rightly so.
“But at the same time, people have been offering free financial advice or free tips for forever and a day. It used to be in the 1930s what was it they said “when the bell boys start giving you stock tups it’s time to exit the stock”, taxi drivers, whoever it might be, there’s been lots of advice out there from friends, family and strangers for forever and a day and I think most Australians are sensible enough to be able to distinguish between financial advice and a tip from a stranger,” Ms Hume said.
Throughout 2021, Ms Hume didn’t hide her sometimes controversial view on finfluencers, referring to them as the latest iteration in a long line of consumers sharing views about financial markets, not unlike “taxi drivers giving stock tips”.
Speaking at the AFA Evolve Conference in September, she argued against government intervening, noting that the real threat to advise comes from fraudulent members of the industry.
“Earlier this year, I made a comment about TikTok finance influencers or finfluencers, and I made it very clear, if they’re not authorised and registered, they are not financial advisers. They’re the equivalent of a taxi driver giving stock tips,” Ms Hume said at the time.
“It goes without saying that if you make a financial decision that goes drastically wrong based on the musing of a taxi driver or a guy down at the pub, or a 16-year-old on TikTok, it shouldn’t be up to the government or indeed the industry to bail you out.”
Early last year, survey results by MLC revealed that as many as 13 per cent of Aussies aged between 18 and 34 are regularly using platforms such as TikTok, Facebook and Instagram as a financial resource. Today, these numbers are believed to be much higher.
I thought the worst was over when O’Dwyer left. Then along came Jane.
Advice is more expensive, insurance is more expensive, regulations contradict each other, AFCA is a guilty until proven innocent proposition, small businesses are destroyed and a mental health crisis in the industry. What’s more, no one knows who, what or how the ethics body is going to monitor. But sure, the worst is over.
Advisers declare ‘the worst is over’ as there is less than one week until Jane Hume will be gone even thought it won’t be easy under Albanese!
Hume is absolutely clueless. The Libs have destroyed the industry.
The only reason Jane Hume can say ‘the worst is over’ is because she doesn’t actually understand or appreciate how difficult the regulatory environment is for financial planners. What’s the saying? Ignorance is bliss? Jane Hume must be living in bliss.
Oh thank you so much Jane, your mercy and compassion has all of a sudden cause me to have a drastic change of mind for the ballot box. The voters are about to take out their rage on you and frydenberg is his own seat, the schadenfreude I will have seeing you removed is going to be off the scale. Hopefully where our misery ends, theirs starts.
So whilst Hume declares ‘the worst is over’ for advisers we think the worst is ‘just about to begin’ for her…Karma
All talk, no action Jane. Enjoy your time out of the limelight after this election. You had your chance to do something positive and spent your time in power with nothing positive to show, just more destruction of our industry and clients ability to seek advice at an affordable cost.
Sadly Hume isn’t up for re-election on 21 May. We are stuck with her until 2025.
I provide my client base with commentary every fortnight and many readers take my word as gospel. I have no doubt that my political leanings absolutely stopped some labour votes last time around.
I haven’t said a word this time other than to suggest that neither major party deserves my vote.
Might not be much in the scheme of things, but I reckon en masse, all the advice clients around the country who were labour but voted otherwise last time to defeat Shorten’s tax agenda are highly unlikely to be repeating that vote this time around, and I certainly haven’t tried to encourage this time around either. Why would I…
Who should I vote for?
On one side there is dumb and on the other side there is just as dumb, but for different reasons.
It just astounds me how little common sense there is in some of our ministers in relation to financial planning regulation.
On the one hand you’ve got a guy wanting to bring in the experience pathway after 17000 advisers have worked their arses off completing the FASEA exam and on the other is a woman who wants to give influencers open slather on the public…
Hume’s total experience in financial services is a diploma she did nearly 30 years ago and Jones who has no qualifications in financial services it seems…
For me this election is more about who to vote against rather than who for. The Liberals deserve to be punished for the damage they have inflicted on financial service consumers and practitioners. They had ample opportunity to improve things and only made them worse.
Sure Labor may mot be any better, but they couldn’t be any worse. And the Libs might use their time in opposition to reflect on their many mistakes and revamp their shadow ministry.
Ms Hume, finfluencers and Tik-Tok influencers in part make a lot of money through advertising or selling their own solutions.
Their service is ‘free’ to the consumer but free-to-air TV is also ‘free’ and heavily regulated.
There is an adage “if the offer is free then you are the product”. Finfluencers and Tik-Tok providers sell their eyeballs. They have a host of conflicts with their viewers.
The worst is over because Hume and Frydenberg will soon no longer be Ministers. And I rejoice over this.
If I rework, make advice more expensive, add more confusion for consumers and advisers then come up with a plan that looks more like the tangled knots we have now I may stand a chance of becoming a future financial services minister…!
“It goes without saying that if you make a financial decision that goes drastically wrong based on the musing of a taxi driver or a guy down at the pub, or a 16-year-old on TikTok, it shouldn’t be up to the government or indeed the industry to bail you out.”. Our industry does pay for it though Jane as ASIC uses our levy to pay for chasing down unlicensed people because it apparently benefits the reputation of our industry.
Jane Hume will soon get exactly what she deserves and will be gonski as a minister. When she speaks about our profession she just confirms how clueless she is which is a real shame. Hopefully the next financial services minister is willing to listen to us and learn from her mistakes…
Don’t get your hopes too high – the next minister is likely to be Stephen Jones
It appears the only winners will be large super funds providing “piece meal advice” and those 16 year olds on Tik Tok. Both parties want to keep putting band aides on a severed artery and creating carve outs for certain sections of the advice chain.
OK….I’ll conceede….she has no idea and I’ll change my vote…man this is crazy talk. The problem is not Advisers “not willing to go a journey” or “bite sized pieces of advice” or fintech……. it’s bad legislation.
Yes but the reason we pay the AFA and FPA is that they lobby and get us the right legislation. But they haven’t – blame them. The AMA , CAANZ and Law Society defend their members with ferocity- ours don’t .
It would be good if Ms Hume went into bat for the financial planning profession as hard as she does for finfluencers and robo advice firms. The Libs, and Mr Frydenberg in particular, are going to get a good understanding of what happens when you continually attack a profession that traditionally votes for you. Maybe they don’t care they probably have jobs lined up with the masters at the big 4 banks already.
If I dont have a license I can give advice on social media and get product kick backs. If I do have a license and I give advice on social media I get attacked by ASIC, lose my license and open myself up to claims by clients! In other words I am getting punished for doing the right thing.
Still all talk and no action, all I see is red tape and significantly reduced client value, and a country run by ex lawyers who have never owned/run a small business .. you’re a shame jane .. you were never in the game
“ASIC have come down really hard on finfluencers” – really? INFO 269 basically says – “get licensed”. Then it’s the licensee’s problem. You can shift responsibility as much as you link but it’s a new world (an unregulated wild west actually) for licensees as well. ASIC has been silent on whether they consider the amounts financial product issuers pay to finfluencers to be conflicted remuneration. I’m pretty sure it is. Maybe the FSC should look at it’s members. It’s a 6 month battle to get them to fund a PD Day but they pay sponsorship hand over fist to these unqualified, unprofessional, unknowing millenials to steer their “communities” to their product. Free market economics wins until it doesn’t.
Her political instincts are a disaster – she has alienated an industry which historically supports her party. And why did the Liberals even pick her as a candidate in the first place, given her industry super background?
As a liberal voter and Stockbroker of many decades she has lost me. She does not understand the mess she is leaving and sadly she totally refuses to engage with the industry at the ground level. Hopefully after 21st May she will be gone forever. As we face uncertain economic times we need people in the industry with knowledge and experience and this is being lost .I can think of no other industry where careers are being destroyed like this and her total disfunction in our industry leaves me pondering that this disfunction must be rife in the Liberal National cabinet room. She has been a travesty and her cabinet colleagues are to frail to address the problem.
It is not possible to inflict more pain, Jane!
Only those who have survived have settled in, while thousands are suffering mentally and financially from your actions!
A staggering result of such incompetence.
A finfluencer is literally trying to influence others’ decisions – it’s in the name. They have thousands or millions of followers and they monetise their account. How can this “free financial advice” be considered a good thing?
Shame Jane, Shame. I will relish watching you lose your seat on 21 May 2022, you may as well share an Uber home with that other loser;Josh Fraudenberg too as you two have been the worst stewards of Financial Services. You’ll end up Binfluencers, cause thats where you belong in the Bin
I’d love for Senator Hume to explain this magical “digital solution to provide bite-sized pieces of advice” that Advisers can use without issuing an SOA.
Easy. It is a digital SOA (only allowed by Industry funds or the banks), that regurgitates the information put in by the individual and just moves them from one of the in-house products to another.
Right before the election! Well, imagine my surprise. Too little too late as far as I am concerned
“Now that has been a really uncomfortable shift for a lot of people, so we kind of knew that people were going to leave the industry if they didn’t want to come along on that journey.”
I am guessing after May 21 you won’t be coming along on the journey either. Toot Toot.
Jane confirming why she won’t be missed.
Most are yet to complete a very expensive qualification where half will opt out before completing
The worst has just started
I agree with Jane when she said “digital advice does not pose a threat to traditional advisers”
What she doesn’t realise though is that the real threat comes from politicians like her that just don’t get it.
Why can’t she understand that a finfluencer who gets paid to promote something is completely different to a taxi driver that is passing on his musings…
Why can’t she understand that the mountains of red tape she has dumped on financial advisers has not protected consumers…
Why can’t she understand that her Government has created a situation where financial advisers can’t provide snippets of advice (without risking ASIC or AFCA coming for us in 5-10 years time)
Let’s make her and her cohorts understand on the 21st May!! (Note: I did not say vote for Albanese)
For Hume to dismiss the harm they have inflicted on so many, by saying ‘they didn’t want to come along that journey’ to professionalism – is obscene. Many good people, professional people with high level qualifications have left the profession and many of those who remain are a mess. Just look at the mental health surveys. Hume is not fit to serve the public.
Prepare for Opposition, Jane.
And Joshy may well lose his seat altogether
Holding thumbs…I don’t even care if the Libs retain some form of Govt as long as Fraudenberg goes…
Taxi drivers and bell hops don’t make money from financial advice. Finfluencers do. That’s why they do it. It’s called monetising online content. It’s been an established concept for some time.
How can someone so thick, and so out of touch, be given such important responsibilities? If the Libs are re-elected they really need to appoint someone competent as Financial Services Minister. Hume is beyond a joke.
“It goes without saying that if you make a financial decision that goes drastically wrong based on the musing of a taxi driver or a guy down at the pub, or a 16-year-old on TikTok, it shouldn’t be up to the government or indeed the industry to bail you out.”
Oh Jane! It will be up to industry because we will have to restore peoples faith in financial advice. We’re already doing YOUR job for you by protecting the community at large by warning against fraudulent schemes.
Maybe FoFA Bill can have another turn at the advisers!
She needs to go. That is all.