Speaking at an AIOFP dinner in Canberra on Tuesday night, Financial Services Minister Stephen Jones said the new class of adviser, set to be introduced in tranche two of the Delivering Better Financial Outcomes (DBFO) reforms, would be a way to progress greater numbers into becoming professional advisers.
“We need more doors for people to walk through, and we’ll be restructuring the laws to ensure that we can have a new class of financial adviser,” Jones said.
“And we’ll do this in a way which ensures that there is another career pathway into the profession.”
The current system for bringing in financial advisers, he said, is a “perfect set of arrangements on the assumption that people wake up at the age of 18, 19, 20 and say, ‘I want to be a financial adviser’”, yet that is not the way it works in reality.
“We’ve got to ensure that we have the right pathways without compromising on the profession or the professional qualifications, but the right pathways to ensure that we’re bringing more people into the industry,” the minister said.
Put simply, Jones said, “we need more advisers” to service the 5 million Australians at or approaching retirement – which, he added, is not even taking into account people needing to access advice at other life stages.
“That’s the scale that we are confronting,” he said.
“So we’ve got to find a new way, more pathways to bring people into the industry without compromising on the important knowledge or the basis of the profession that is necessary so we can ensure that somebody is giving competent, professional advice to their clients.
“We’ll also ensure that the new class of adviser becomes a pathway to a full degree, because I think that’s what the industry needs.”
‘Big challenges’
Speaking about the second tranche more broadly, Minister Jones assured it is coming “very, very soon”.
“There are some big challenges, and I’m taking them on because I think it’s the right thing to do. We need to ensure that we get political consensus and public consensus,” he said.
Chief among the reforms are statements of advice (SOA), which Jones said should be something “mum and dad can read around the kitchen table, not something that is used as a defence for a product issuer or a licensee in a courtroom”.
He added that the updated form of an SOA will be a practical statement of the information clients need to make a decision.
The second tranche will also see a “modernised” best interests duty, which Jones said would “specifically provide for scaled advice”.
“If you are providing simple advice on pretty straightforward product, then you do not need to provide 60-, 90-, 100-page document, or to have 3, 4, 5 consultations with your client,” he said.
The minister added: “When we land all these things, it will set the industry up for a long time.
“It’s in the public interest to ensure we set Australians up with access to the information and advice that they are going to need to make the sort of decisions they are going to have to make with the real money that they are increasingly retiring upon.”
His man is totally delusional and hasn’t achieved anything beneficial for financial advisers since he raised his head. Bye Bye Jonesy
” We’ll also ensure that the new class of adviser becomes a pathway to a full degree, because I think that’s what the industry needs”
Translated means:
” We’ll also ensure that the new class of adviser becomes a pathway to a full degree, because I think that’s what the Industry Super Funds need.”
The only door Jones needs to be walking through, is the door he also closes behind him when he leaves the building.
What about the door that opens into his new industry super fund position?
Jones will talk loud without saying anything significance or substance.
I have no idea what this means.
“We’ll also ensure that the new class of adviser becomes a pathway to a full degree, because I think that’s what the industry needs.”
Need more doors?
We all hope Jones walks through a one way door that will see him exit out of Canberra shortly…
You had a pathway – Accountants (with specialised qualifications) You let that slip. How many limited licensees are left? What a dud decision that was – cost me $20K for sheer grief watching the vascillations in government and constant rule changes, qualification upgrades, and sheer indecision.
The more you keep moving the goal posts, the harder you will find it is to attract people to the profession. All this tinkering is making people look for careers elsewhere, where there is stability!
Here’s a question for Mr Jones.
“Yesterday, legislation was passed halving your salary. However your duties have now been increased to cover parts of other portfolios. In addition you will now be required to sit and pass an exam on Parliamentary ethics written by the NACC”
Does anyone think that Mr Jones, given those hypothetical circumstances, would not start looking for a new law career in the corporate sector.?
Mr Jones has been drinking the Kool-Aid provided by the life insurers. That speech is their script. Implicit in his speech is a statement that LIF is not the cause of most of the life insurance industry’s problems.
So here’s the next question: Why would anyone come into in this industry, fully informed after speaking to current Risk advisers, as a career choice.
You’re absolutely right, and when you factor in the ongoing costs of maintaining a license—such as annual renewals, continuing education requirements, and professional insurance—it raises a valid question: Why would anyone choose this as a career?
“The second tranche will also see a “modernised” best interests duty, which Jones said would “specifically provide for scaled advice”.”
Is this code for a best interest duty for their union mates and separate one for professionals?
Here’s my guess:
– Super fund advice will be paid from the administration fee (free advice).
– The scope of super fund advice will be enormous, but described as ‘not complex’.
I have zero faith or confidence in the ALP to deliver a level playing field.
It’s not free advice. It’s paid for by all fund members. Some members use the service, most pay fees for no service.
And it will exacerbate the wealth inequality as younger Industry Fund members are forced to pay Hidden Commissions for older, much wealthier retirees that will predominately get the sales advice.
He’s already stated they’d be a “handful of advisers” in terms I can only describe as Advisers working at Perpetual Private Wealth, and the majority of Australians getting advice from a Super Fund. If that you in the middle you’re not wanted.
Hi Stephen Jones Dont forget there are 100k registered tax agents and accountants that can fill this shortfall. It is frankly crazy that accountants with years of experience cannot advice on financial products and SMSF’s.
Gerald Kirk
Kirks Accountants
Stick to accounting. Some of the worst rework I’ve done has been due to over-confident bias accountants. Terrible client outcomes.
Have you looked at the make up of CSLR claims?
A stack of SMSF advice in there.
Haha no. You either become fully licensed or not.
The amount of rubbish financial advice I’ve seen peddled by accountants in the SMSF space is enormous.
Where ever there is an inappropriate smsf with a clueless trustee, there you will find an accountant increasing his earn on the poor fool.
Total BS
Jonesy’s only concern is green lighting Uneducated, unqualified, single product, hidden commissions, Industry Fund product sales.
Real Advisers will get minimal Red Tape reductions and continue to be swamped in 20 years of useless, costly Canberra bureaucratic BS that halves the number of clients that can get Real Advice.
I’ve got zero faith in this blokes ability not to compromise the integrity of the current advice cohort.
Previous Government should have left a few traditional stockbrokers and good and advisers in the system that are high with experience and understanding to be part of the transition
The only door Jones needs to be concerned about is the one that hits him in the back of the head as he leaves his parliementary swill for the last time after the next election.
It’s all very well to say we need more entry doors, but how about doing a few things that might make the exit door less appealing
Poor bugger. He still thinks he’s going to have a job next year.
Quote of the month.