Why Mulino’s history with FOFA reforms shouldn’t scare advisers

A mere mention of the Future of Financial Advice (FOFA) reforms is enough to send a shiver down the spines of many advisers that were active during its introduction.

However, speaking on The ifa Show, Financial Services Council (FSC) chief executive Blake Briggs has argued that Financial Services Minister Daniel Mulino’s involvement in the process has the potential to positively influence his approach to current reform efforts.

“Dr Mulino is a great choice for the role, so he's received broad industry welcome and support, including from the Financial Services Council,” Briggs said.

“I've had the pleasure of working with Daniel for quite a long time. I first met him when he was a staffer under Bill Shorten working on financial services and tax policy issues, and so his knowledge and experience of the industry is very deep.

“Now, don't get me wrong, a lot of people in the advice community would remember that Shorten period as the period of FOFA and that might bring back a bit of PTSD and shock, but the reality is, I think Daniel during that period was one of the really sensible policy heads in that office and did a lot of good work with all the organisations that were involved in some of those debates.”

While Briggs is confident that the minister’s involvement in past reforms has provided him with a solid understanding of the “dynamics of the industry”, FOFA is also a perfect example of intention and outcome being misaligned.

“He probably has his own views about where some of those historical reforms were well intentioned but didn't always achieve their goal,” he added.

“If you look at it through the lens of things like the advice reform, you'll have a good understanding of what were they trying to achieve through things like FOFA versus where we actually ended up today.

“I think when you do that analysis, it puts a lot of emphasis on the need to continue the reform process. Headline view is Daniel is a great choice for the role, very well qualified on paper, good understanding of our industry, and my experience of him is he's a very consultative and collaborative minister, so I think we'll be a good relationship.”

Noting that the reaction from advisers on the ground has been less optimistic than that of industry associations, the CEO argued Mulino would work closely with all stakeholders to “get to the heart of an issue”.

“That's really the right approach to take,” Briggs said.

“My advice to the advice community would be: don't jump to conclusions. Let's judge him on his merit, and we'll see whether or not he's willing to work constructively the same way we are.”

He also argued that, despite Mulino’s predecessor saying the Delivering Better Financial Advice reforms could be finalised in another six months, every government “needs time to get its feet under the desk”.

“They will always consult with you about what things should be prioritised, where were predecessors perhaps taking the wrong approach on some issues,” Briggs explained.

“In particular for Mulino, there is a lot of announced but unenacted measures that he's going to have to work through. So, if the industry gets ahead of itself and is saying, ‘why haven't you given us certainty yet? Or why haven't you agreed that my priorities are also your priorities?’ We'll actually end up getting them offside.

“The reality is we need to work through them, methodically, help them do their job well. That's where we can provide a lot of support but also be constructive. If you're too loud and shrill in some of these debates, you very quickly lose a potential ally. So, let's take the mature approach, let's take the high road approach, and I think we can get some important stuff done during the term of Parliament.”

To hear more from Blake, tune in here.