The Coalition has labelled the first tranche of the government’s legislation in response to the Quality of Advice Review (QAR) an “embarrassing blunder” following the Joint Association Working Group (JAWG) earlier on Monday urging the government to act swiftly to clean up the “hot mess”.
In a joint statement from shadow treasurer Angus Taylor and shadow financial services minister Luke Howarth, the opposition said the government is “scrambling to redraft [the legislation] because it would have forced insurance brokers to overhaul their entire business model”.
“Financial advisers are today warning that it will add red tape and drive up costs for customers because it requires superannuation trustees to check every piece of advice given to members,” the statement said.
“This is the consequence of a government that is asleep at the wheel.”
The shadow ministers also noted the delays that have hit the QAR response, saying it has taken a “staggering 16 months to begin responding to the review, with no timeline still for a full legislative response”.
“Despite the delay, it’s clear that instead of using that time to draft considered legislation, the government has failed to get the basics right, creating more problems than solutions,” the statement said.
Taylor said the government’s failure to progress meaningful reforms are creating an Australia that is “underbanked, underinsured and under advised”.
“The Albanese Labor government was handed a considered and timely review by Ms Michelle Levy that would have provided a safer, simpler and cheaper financial advice to all Australians,” he said.
“Instead, the government has been dragged kicking and screaming to respond to what should be a seminal productivity roadmap for our finance advice sector.
“Unsurprisingly, the first tranche of the legislation is riddled with errors that put other vital measures in the bill at risk.
“Labor just can’t help itself. Stephen Jones is making access to advice harder, at a time Australians are crying out for affordable financial advice.”
According to Howarth, the QAR legislation has proven that Financial Services Minister Stephen Jones is “out of touch and out of depth”.
“At a time when it has never been more important for Australians to have access to quality financial advice, the proposed Treasury Laws Amendment (Delivery Better Financial Outcomes and Other Measures) Bill 2024, as it currently sits, will make financial advice more inaccessible and expensive,” he said.
“The only thing the Assistant Treasurer has successfully delivered in his scrambled legislation is confusion and chaos.
“Industry players have been crying out for reform, only to have their concerns met with deaf ears. They are rightly angry.
“The government must act to immediately fix its mess. It’s time Stephen Jones steps up or steps aside.”
I suspect that Treasury is drafting the Legislation for Minister Jones. Treasury employs Commonwealth Public Servants. My experience with office working Government employees was that they never valued my advice, likely because of their culture where they think they know better. Typical of top down, vertical hierarchical organisational structures of rights imposed by Law, they think Law is the answer to functional dynamics when it never was and never will be. There needs to be a horizontal coordination from the bottom up (1) advisers to industry association, (2) industry association to regulatory authority (3) regulatory authority to issue rules, (4) advisers give feedback on rules effectiveness to their industry association. This coordination does not require politicians to operate, as their past showed that they introduced systemic complexity unproductively. All politicians need to do is set up the information efficiency, coordination framework that allows for coordinating functions for meaningful governance to clients. Minister Jones who is a career politician with no finance management experience can go back to his old job with competence. As Professor Johanna Weaver – ANU College of Law said to the Senate Economics References Committee on Tuesday 2 October 2023: “Mega silo regulators do not work and what we need is coordination.”
Minister Jones is playing our industry for patsies.
It is abundantly clear that the current Governments actions and delays on any meaningful change plays into their “jobs for mates” in the Industry Fund sector. A nice added retirement income for ex-Labour pollies on top of their exorbitant defined benefit pensions. This so-called Qualified advisers situation provides a golden pass to Industry Super to vacuum more advice into the Industry Fund sphere. To the detriment of consumers and our industry.
I have always wondered why no one talks about efficiency in the Industry Fund sector. Profits to members, sure. But clearly it is a very profitable sector to be working in with numerous kickbacks for Unions and the Labour Party…look at the board members!
More of the same. Facts are that Libs want their banker mates controlling super, the ALP wants their industry and union mates in charge and NOBODY wants actual financial advisers providing advice.
QAR will go the way of the Henry Tax review when ALP (Rudd) endorsed and implemented only 3 of the 138 recommendations.
Forget about QAR having any meaningful impact on reducing the cost to serve clients.
Reform what’s inside your control, the systems and processes that deliver advice as opposed to relying on the governing structure. If you wait for that, you’re a fool.
We need our own industry political party. When you have seats and can control what gets in or not, you have a voice. Until then, it’s all falling on deaf ears and AIOFP and FAAA are wasting their breath.
What if we had our own low cost Industry Super fund too. We could put a lot of clients into the fund, then have less trouble with fee consent, plus you could make payments to representatives for lobbying. Just play the same game as Industry Super does.
better still, just have the clients roll their super into their home mortgage (Under Senator Bragg’s new scheme) & sell them risk insurance instead. Problem completely. solved.
“Taylor slams Jones, says he is making access to advice harder”
But that’s the purpose – Jones & Albo have zero interest in making the provision of advice easier for Professional Advisers as they’re so focussed on starting up ‘qualified advisers’ with the ISF’s, and bypassing all of the costs, red tape and legislation with a massive carveout for the ISF mates. Why have they not fixed the ‘hot mess’ via the easy fixes in the QAR by now???
It has now been nearly 2 years since Jones has been FS Minister, and another 12 years he’s been an MP, what do Politicians do when they are in the Opposition??? He should have had the ‘hot mess’ fixes drafts / briefs well before becoming Minister for FS – that’s if he really wanted to fix the ‘hot mess’.
Taylor is 100% correct
I agree the QAR is not yet the answer (there are some positives in there though) but it is laughable to be going on the front foot saying we messed it all up a couple of years ago, drove an industry to the brink, cost business and ultimately lives and you aren’t moving quickly enough to fix our mess.
No it’s not when this is exactly what Libs said before they were punted. They acknowledged the mess and created the QoaR
“This is the consequence of a government that is asleep at the wheel.”
Yes, asleep at with wheel with Professional Advisers whilst Jonesy & Albo spend their time crafting the role of ‘qualified adviser’, to appease their ISF buddies.
Putting politics with FS legislation history aside – LNP, Labor, Greens etc, what Taylor and Howarth, and Slade Brockman have come out and publicly stated is what Professional Advisers have been begging to hear from Canberra – 20 years waiting to hear this!
Bit rich given that Taylor’s mates spent the last 4 years destroying the industry
This is also true & correct – advisers have been copping it from both sides for 20 years – the only thing that is consistent is the chaos and destruction.
Yep
Taylors message is accurate
Problem is ITS TAYLOR SAYING IT
Let’s don’t forget who created this HOT MESS…..Frydenberg, FPA, AFA and friends…yes Jones is far from perfect but put in place the 10 year education rule….
That’s not a sufficient excuse anymore. The previous government were the ones who instigated QoAR and backed Levy. LABOR have cooked this up, by listening to Treasury rather than the profession. They are not competent can’t even write a Bill without a major error.
Please put this article under Mr Jones’ nose and show him that the average Australian is willing to pay $570 for advice, the amount of red tape this moron is throwing at us in addition to the current mountain of compliance and regulation we are going through now not to mention ASIC levy left right and center, this guy needs to wake up. $570 !!!!!! what do not you understand MR JONES?????
https://www.moneymanagement.com.au/news/financial-planning/how-much-would-unadvised-aussies-pay-advice#:~:text=If%20they%20are%20seeking%20advice,up%20from%20%242%2C510%20in%202018.
Jones is clearly caught between ‘a rock and a hard place’ of too many politically motivated vested interests, all wanting a slice of the financial services advice pie, which may not necessarily advance the Australian public interests.
100%
You have missed the bigger picture Angelique. The most powerful vested interest of all, union super, doesn’t want a “slice of the advice pie”. They want to destroy professional advice altogether. Jones’ delays, inaction, and mistakes, are at the behest of his union masters.
“Industry players have been crying out for reform, only to have their concerns met with deaf ears. They are rightly angry.
“The government must act to immediately fix its mess. It’s time Stephen Jones steps up or steps aside.”
Angry is a massive understatement.
Ok Taylor and Howarth.
You put every single recommendation you would implement if you were now in Govt in a binding, Statutory Declaration and send it to every Adviser Representative organisation and publish it.
Then we will see if you are simply just shopping for votes, just like Jones did before the last election.
The libs initiated the qoar after admitting its gone too far, they have on multiple times consistently across multiple shadow ministers stated they will implement in full.
Until the ANNUAL Fee Consent Forms for retail advisers have been eliminated, a unique form of Canberra Red Tape that doesn’t exist in any other nation on earth, Australia will remain “under advised”. What happened to the Coalition’s past commitment to eliminating Red Tape for Small Business? Still waiting.
I honestly don’t understand how they get it so wrong. All they would have to do is schedule conference in every major city for 2 hours, hear what an elected mediator has to say allow them to guide a constructive feedback session.
We have contempt, not anger.
Disappointment and understandable fatigue
Guys and I mean from both sides of the asile. Let accountants in public practice advise their clients on super. Therea re thousands just waiting and frustrated they can advise on tax, audit super funds and yet cannot advise clients on setting one up or setting up a pension.
Awful. Accountants have provided some of the worst outcomes I’ve seen, stay in your land or get qualified to advise properly
Have to agree with this – probably at least 75% of all of my prospective new referrals have received ‘unlicensed advice’ from their accountant – contributions, SMSF establishment, withdrawals, pensions, TBC, insurance alterations and hold or get rid of, investment advice particularly with shares – the unlicensed advice list is endless.
Where are all the advisers on this forum suggesting vote labor ?????????
Heaps are and we shouldn’t. Both parties let us down, tine to swing to the party who will affect change. Irrespective of the past
100% – drum up all your clients – let’s go!
According to Howarth, the QAR legislation has proven that Financial Services Minister Stephen Jones is “out of touch and out of depth”.
You bet is!
He is completely incompetent and bias towards pushing industry funds at the cost of Australians receiving objective appropriate advice. Disgusting