Speaking at a dinner hosted by the Association of Independently Owned Financial Professionals (AIOFP) in Melbourne on Wednesday night, shadow treasurer Angus Taylor underscored the importance of financial services on the broader economy, saying that currently “the settings are wrong”.
“The key indicator for me is really simple. What we’re seeing now across Australia is Australians are increasingly underinsured, underbanked and under-advised,” Taylor said.
Addressing these concerns across financial services, he said that while the royal commission resulted in “many very worthy recommendations”, the impact has also gone too far.
“I think we’ve got to a point that there’s been an overreach in regulation, and that’s why we were the first to say we need to change the way we think about regulating this industry,” the shadow treasurer said.
He added: “We are increasingly under-advised … we have around half the number of advisers we had about a decade ago and there is no question whatsoever that Australians are not getting the advice they need.
“I strongly supported Josh Frydenberg in his role of putting the Quality of Advice Review in place to start at how we can pull back some of the overreach that we had seen. I think that was a recognition that there had been overreach and that it was starting to have consequences.”
Taylor also affirmed the Coalition’s long-standing support for implementing the QAR’s recommendations in full; however, speaking with ifa, he acknowledged this is “not the whole answer”.
“It’s an important part of the journey, and we should have been getting on with it as quickly as possible. It’s taken too long,” he told ifa.
“That’s not to say that every recommendation in the QAR is perfect, or that it’s the full answer. There will be other things we’ll need to do, and life insurance is one where I’m acutely conscious of the fact that the industry is in decline, and yet it should be an industry that’s healthy.”
Indeed, he noted that there are a range of issues that were not dealt with through the QAR that need to be addressed to get advice “back on its feet again”.
Unfortunately, there is no “silver bullet”.
“I think getting rid of unnecessary regulation and compliance is important. The QAR went some way towards that,” Taylor added.
“I do think making sure that anyone who is well qualified to be an adviser should have a pathway to get there is incredibly important. We have made it difficult. There’s no question about that.
“But I also think we’ve made it difficult to use good technology tools. I think human plus technology is incredibly powerful, and this is a sector that’s made for that, and yet we’ve made that very difficult. So, there’s a range of different levers, and we need to keep pushing.”
The shadow treasurer also criticised the government’s slow progress on implementing advice reform, saying the opposition has been “unhappy with the pace at which this has moved”.
“We have felt that it’s moved in a way which has been driven by the interests of those closest to the Labor Party and whilst the industry super funds, for instance, play a very important role in our economy, they shouldn’t be setting the agenda for the economy,” Taylor said.
“They should be part of that. And it’s really crucial we have an independent advisory sector that is playing a really central role in our economy for many years to come. So, the Quality of Advice Review we saw as important. We don’t think though that that’s the end of it. We think there is much more work to be done.”
Bottom line is that the average annual cost of advice is near enough to over 5% of the average persons take home pay. Why pay for advice if it ultimately saves you less than the fees?! A huge part of the problem, which people are scared to mention, in case they are seen as unethical for mentioning that they don’t agree with it, is the opt in process with fees. They can muck around with SOAs etc as much as they like, but the pressure to have an annual review whether needed or not and to get paid, just drives up fees.
Easy Angus, just remove all fully qualified professional Advisers from the Corps act and establish a new system, much like Accountants work under, and keep all non-qualified advisers in the Corps act. This will be much simpler than trying to bend the current system to work for the new profession. The incentive to become fully qualified, if not already, will be strong due to the lack of red tape under the new system.
How good is the fact that education now reflects 10 years in the industry…. no subjects at Uni will give this level of professionalism… common sense did prevail after many years of arguing
So it seems the ‘conspiracy theorists’ who suggested Frydenberg was pulling Jane Hume’s strings were right after all.
Ex Australiansuper Jane Hume keep her away from anything requiring sense or objectivity
As rubbish as the Libs were under Frydenberg, I’d rather Howarth than Jones by a mile.
Agree
Silver Bullet?
Don’t forget everyone that we went from 30000 advisers to 15000 under the coalition.
I don’t trust any of them.
All of the measures to repeal not increase regulation are also coalition led, after admitting it had gone too far. The QoAR measures were all under Liberal. Labor came in, legislated CSOLR removed their subsidy of it, removed the need for providers to pay, and deliberately sat on their hands and gaslit. Surely the rational thing is NOT to reward this and give 2 more intelligent (than jones frydenberg or conflicted hume) in Howarth and Taylor. an opportunity. They could ask Bragg as well.
Why did not the previous Liberal government implement changes while they were in government. It’s all very well to Question is why the previous Liberal government did not implement the changes they are now advocating for while in opposition. Too often, political parties make promises while in opposition to highlight issues and rally support, but the real challenge comes when they have to translate those promises into action once in government.
In many cases, the complexity of financial regulation and compliance can become a significant barrier to change, as it involves balancing transparency, consumer protection, and industry needs. It remains to be seen whether the current or future government will simplify financial advice and reduce unnecessary regulations. It’s essential for them to prioritise actionable reforms that genuinely benefit consumers and the financial sector as a whole.
Labor has increased the cost across the board at least the coalition knew their policies would negatively impact advice, not like jones who is under industry funds thumb and will lie to our face while stabbing the profession in the back.
With the greatest respect Sir, I cannot agree with your proposition that the Coalition knew their policies would negatively impact advice.
I put it to you the Coalition never even considered the issue. Freydenberg was so keen on snookering Bill Shorten should he come to government and seek to favour his mates in the superfunds,that Freydenberg was always looking for ways to concrete in his legislation.His concentration would have been on what the banks wanted, because after all they were the big donators to the liberal election funds. Frightened and O’Dwyer were both ex-bankies. Hume was trying to make up lost time for her work with Australian Super, who by that time just as big as the banks
“I strongly supported Josh Frydenberg in his role of putting the Quality of Advice Review in place to start at how we can pull back some of the overreach that we had seen”.
Frydenberg was a maniac Adviser killer for the last 9 years of his LNP life.
His single goal was to support the Banks and Life Companies to fund him into the PM job.
And that came with a call from the Banks and Life Companies to blame Advisers for all their evils.
Frydenberg got what he deserved when the AIOFP rallied Advisers to help get him kicked out.
The LNP whilst now accepting some past mistakes, have a huge way to go to fix the Gordian Knot of Over Regulation.
As for the rest of Canberra Pollies and Bureaucrats, GET OFF Advisers necks, let us breath and do our jobs.
The past 20 years of treatment from Canberra to Advisers is beyond disgusting.
The only way we will get change is if labor and their industry fund pandering are OUT
It’s not rocket-science, Angus. Ask AIOFP’s Peter Johnston to draw some pictures for you, in crayon. This whole mess can be resolved in a heartbeat, if you were serious.
Yup. Maybe chalk is required. He might stick the crayon up his nose.