Here I am on a Monday morning, struggling to put into words where it all went wrong. Remember Minister Stephen Jones’ promise to fix the “hot mess” that is advice? Well, it seems like he decided to go all-in on making it an even hotter mess, throwing more wood, coal, and pretty much anything he could find onto the fire. It’s like he took a bad situation and cranked up the heat a hundred times over. What a week, right?
The advice profession came to terms with the fact that the Quality of Advice Review (QAR) wasn’t really about them a while back. They accepted the fact that while the QAR promised to eradicate some of the severe red tape remnants of the royal commission, its core aim was to bring more advice to more Australians.
It was around mid-year, just before Financial Services Minister Stephen Jones unveiled the government’s initial QAR response, that we came to realise that we really couldn’t let perfect be the enemy of good.
Advisers even got on the bandwagon, thinking that maybe giving superannuation funds more advisory powers could be a positive move. The catch was simple: as long as the minister assured everyone that funds wouldn’t be shoving backpackers into hidden call centres, and as long as these fund-backed straightforward advice providers were legit, it seemed like things might play out in advisers’ favour.
We even began to envision an industry where funds helped funnel more candidates into financial advice, an industry where funds worked hand in hand with professional advisers to ensure Australia’s retirees got the retirement they deserved.
And then the first tranche of the government’s legislative response dropped, putting a bit of a stain on our hopeful fantasy. You see that red tape relief the minister had promised wasn’t quite there, but we listened and trusted when he said that it was coming.
Back then, he assured us that by the time Santa made his rounds, we’d have a clear picture of where the government stands on the QAR and what legislative plans they had in store.
True to his word, and perhaps in a surprising twist of punctuality for Jones, we were summoned to Canberra bright and early on 7 December. Alongside a crew of top-notch professionals, we gathered to hear the minister’s presentation.
And then came the moment we’d rather forget.
No need for me to replay his words or dwell on the fact that he metaphorically slapped, no, gut-punched the advice community, that he shattered nearly every promise he made since May last year, all with a smile on his face.
What’s truly irreconcilable is the notion that maybe he never made an effort to understand in the first place.
Does he not understand the toll the professionalisation of the industry emerging from the ruins of the royal commission, has had on the advice community?
Doesn’t he recall the havoc wreaked by the banks when they had unchecked control over the advice industry? What was the royal commission all about, anyway? Why did we invest years in purging the industry of its tainted reputation?
Did he listen to advisers at the dozens of meetings he attended across the country?
And finally, but most importantly, why “qualified adviser”?
Above all else, beyond the notion that banks have a role in advice, what truly outrages, hurts, and demoralises advisers is the idea that a bank employee could be given the title “qualified adviser” with nothing more than a yet-to-be-determined diploma under their belt.
What happened to his commitment to ensuring that consumers are not taken advantage of?
We have a lot of questions that will likely remain unanswered but one truth has emerged – those two words, “qualified adviser”, were enough to bring Jones’ reputation crashing down.
While the advice profession has the opportunity to sway his decision through advocacy and submissions, the undeniable truth remains that after months of consultations, submissions, promises and seemingly false understanding, all the minister could deliver was the one thing that the advice profession feared the most.
I sense that trust has been irreparably shattered. My only hope now is that this adversity prompts at times a profession to come together in alignment and agreement, forging a new bond among the some 15,600 professionals.
There is a big difference between “financial advice” and “financial planning” whereas the legislation only defines ‘financial product advice’. That is, a recomendation of which particular product or class of product to use.
Superannuation decisions are really all about forward planning. Good planning is about far, far more than just picking a product. Forward planning goes beyond immediate day-to-day issues and helps people anticipate what life might hold in the future and the impact of today’s decisions on tomorrow’s finances. Forward planning has to be done at household level, and be personalised and actionable. It should be part of a holistic process that includes budgeting and long term cashflow planning and stress testing. This helps people prepare for future life events and to understand the probabilities and risks of a long life.
This includes vital emotional reassurance, practical tips, judgement, and an understanding of human behaviour to support people making life decisions that are sometimes irrevocable. It also involves understanding and adjusting to constant regulatory change, economic uncertainty and dealing with personal dramas too.
Not sure how backpackers trained on superannuation product rules can achieve that. Poor forward planning affects people irrespective of their income level.
Starting to think I might trust AMP more than this deceitful mob in government…need a new party to come together and win just 40 seats…should be enogh to turf the liberals and labours out of their comfort zones…
Over 33 years of professional service to loyal, satisfied clients and this industry shattered me to near breaking point.
I was very lucky to get out alive, but the lasting impact of the stress, anxiety and depression that accompanied my final 4-5 years of practising in a toxic, discriminatory, relentless attacking and constant blame environment destroyed my faith entirely of any Govt ever thinking and treating us with the respect and empathy that we deserve because of the incredible value, guidance and trust we provide to a large number of Australians across a range of Financial Services and personal advice.
I cannot for the life of me work out why successive Govts relentlessly continue to exhibit disdain, disrespect and discrimination bordering on hatred toward so many who do so much for so many.
This is a very very sad business that has destroyed the self confidence of so many good people who cared tremendously for their clients and their financial well being.
It has been and continues to be an orchestrated and manipulated cleansing the likes of which no other industry or profession has ever had to endure for such a protracted and sustained period.
It must cease.
The whole Advice Community has been and continues to be played by all of the Policy Makers and the Power Brokers for well over 20 years.
Why is every other Profession left alone?
On any measure or gauge, the Advice Community has been treated appallingly and continues to be punished through the faults of others.
Why is Jones so reluctant to dismiss the priority of reducing red tape, abolish the un-competitive ASIC & CSLR Levies, and working with Advisers to Professionalise our Industry for the purpose of helping advisers see more clients?
Don’t give Jones and Labor any benefit of any doubt, just turf them out and bring in somebody else.
The advisers carried the blame because we let them blame us. We tolerated it because we had faith in institutions that have clearly failed us. Sure, stay a member of them if you like but remember the old saying; fool me once, shame on you, fool me twice, shame on me!
Why were so many of our representative associations, including my own licensee, completely fooled by him?
Or, did they prefer to sit on their hands, whilst ever us advisers were topping up their feed-trough?
(Maja, you did a really great job on the interview and this article… I too, was a sucker for his BS)
“Qualified Adviser” – false & misleading comes to mind. Two bob for ASIC’s thoughts on this proposed designation.
Sad Sad Sad that any young people contemplating a career in financial advice, DO NOT DO IT!!!
Well said Maja.
Articulate and speaks for all of us. Shattered TRUST.
Again.
What is the point of spruiking so-called good advice when the most misleading term is saying an unqualified adviser is now called qualified.
HOW?
I laugh, this was always the game plan – its patently obvious that the effort has been to ring fence the ISN world with the cheap offerings. its the old routine – my enemies enemy is my friend.
I wonder how all the fan boys and sycophants to the “re-imagined” world of professional advice feel now- Accountability – more like total bloody failure. Go back in time to Messrs. Dean Sanders and the need to professionalize the industry. a Laughable fool then when the old guard said we were being played – and a bigger laughable fool now the proof is in the pudding.
its like cards – poker specifically. If you don’t know you are being played – you are definitely being played. And the new standard of a mandatory degree of the pre-requisite ALQ7 level – not any undergraduate degree – but a prescriptive degree. Such putz’s played for fools
Well written and expresses the frustration of most of the 15,600 advisers that continue to shoulder the burden of past bad decisions. To have come so far, and now to bolster the depleted ranks of the 15600 with product floggers!
I hope I am long gone from the industry before the next royal commission, when advisers once again carry the cross for poor decisions by politicians with little or no life experience or qualifications.
Expect nothing and you will not be disappointed.
Just a new lap on the old, well worn path, around the same mulberry bush folks. Samo, samo..
Did anyone reeaalllyy expect anything else…really?
Political wisdom and common sense; professional unity; all with one purpose…
Unfortunately Santa isnt real and pigs dont fly….
Seasons greetings and a happy NY, in spite of it all!
The fundamental problem is a lack of understanding of what being a professional means for a consumer when they grant trust to advise.
Can you imagine the medical professionals having diploma qualified doctors ? The common use of the word qualified imputes the advisor is fully qualified to receive and deliver on the gift of trust across all aspects of the personal advice landscape. However in this case the use of the word ‘qualified’ would in reality mean someone who is not fully qualified educationally, and without the depth of experience.
In the end the consumers’ best interest is & will be compromised & the level of complaints will escalate to the detriment of the industry as a whole. This move by the government is as alarming as it surprising and one is left contemplating its motive.
“This move by the government is as alarming as it surprising and one is left contemplating its motive.”
Amazingly naive statement. Have you heard of Industry Super?
Just exhausting!
It is all at best abjectly incompetent and at worst deliberately misleading.
Jones has just fallen into line with his Union paymasters. But I’m sure without so much as a blush he’ll still lecture us on conflicts of interest, and cost of advice.
An “unqualified adviser” is a “qualified adviser”
Mony Python at its best…
Yes Minister?
Is residing in Fawlty Towers
Serious question.
“Qualified Adviser” – Do you think they sat in a room and fell about the floor laughing at that term/proposal over a couple of beers ?
What an abject disgrace !