Bill Shorten on the Government’s reform agenda: “I like planners.”

SLATTERY: They do. In our area, we have, effectively, 100 per cent engagement

SHORTEN: You know, let’s not undermine the basis of concessionality, people. Like, if they’re not getting it now, they don’t want to see it monkeyed around – I think you start to make the case for super generally harder. So that’s why I think 9-to-12 is the simplest and clearest proposition, and when I talk to – and just as I’ve spoken at John Brogden’s group and I’ve spoken at ASFA, I’ve also spoken at union meetings about superannuation, and there hasn’t been a session I’ve done where someone will say, ‘I need the money now,’ and I make the observation: well, if you have a wage rise beyond a certain point, you’re handing it to Glenn Stevens or you’re paying it in tax. Isn’t it better to have the concessional treatment and at least it’s all yours? And people get that, as part of a mix, you know, as part of a mix of an outcome. Yeah, I’ll leave it there; I’ll come back to the point about communications later.

TATE: Confidence, consistency, certainty you’ve pretty much just said is all required. The reviews – certainly Ripoll – came up with recommendations of abolishing commissions, and it must be one of the longest-debated issues of the industry; and also conflicted remunerations structures, including volume rebates on platforms, and the like. Are you committed to legislating on those issues?

SHORTEN: Yes.

TATE: Okay, great. Mark, your question?

SHORTEN: Just proving I can answer something quickly.

RANTALL: I was just wondering about the interdependencies of the getting to 12 [per cent], in terms of the negotiation you might have to go through – as an example, whether you get a mining tax or not. But I was just interested to see where the play is at.

SHORTEN: I’m confident the government will make a landing on the mining tax. You can debate the merits how it was proposed and first debated, the reality is that Julia Gillard and Wayne Swan had the largest mining companies agreed to a mining and resource tax, there is plenty of detail to be negotiated, but there will be an outcome. So to that extent…the stronger the case for superannuation increase, the greater the base for the mining tax is. The superannuation propositions are a good idea, but there will be a landing on the mining tax, and most Australians – and indeed, many mining and resource companies – recognise that because this is a finite resource that’s being exploited appropriately, there should be some return.

People do recognise that between the start of this decade and the end of this decade, that the proportionate share of government revenue arising out of this has changed, it’s no one’s fault.

When we increase superannuation, and because of its concessional treatment, there’s less revenue to Treasury, and that obviously has to be – a gap has to be filled.

We will make a landing on it, on the mining tax, I have no doubt about that, but then we’ve also got to make sure that we get all of the things which are most important to all the people you work with, as well, right.

RANTALL: Just following on the theme of, you know, perhaps diminishing confidence in superannuation, and you know, I think part of that is the importance of obtaining financial advice from a whole variety of sources: superannuation funds and call centres and banks; but also from financial planners. So I’m just sort of wondering what your sense is around the role of financial planning as it relates, not just to superannuation, but the savings culture in the Australian environment.

KLIPIN: To Mark’s point, financial advisers don’t look at superannuation on its own, and they don’t look at insurance on its own, and they don’t look at investment plan on its own.

They kind of take a person… on a journey, and that’s what financial advice is really all about; and what we’ve got in the mix at the moment obviously, with the superannuation conversation and the FoFA conversation, is kind of this moribund conversation because it’s kind of so [mired] in the technicality of it, and…we talk to ourselves a lot about our own stuff – and it’s just noise; in consumerland, it’s not about their world.

We’ve kind of been in the agenda of minutiae now for about three years, and it’s not looking likely until 2012, assuming again we get all the stuff up. You know, that’s five years of, I reckon, lost opportunity where people are kind of turned off because we, as an industry, are not talking to them about their issues, we’re talking to ourselves about our issues; and I’m hoping that, you know, as the big vision piece, that in two and a half years’ time, we’re sitting here and we say, you know, ‘Minister Shorten was a fantastic minister for financial services, and here’s the stuff that we nailed,’ and consumer confidence goes up and people make decisions and they get serious about their insurance issues and their savings issues, and so on. More a comment than a question.

SHORTEN: Yeah, that’s fair enough.

HELMICH: I think we have got a great opportunity. We see the opportunity from the many reviews that are coming on to try and lift public confidence in broad financial planning and financial advice, there’s (unclear) in that space. We think about 17 per cent of people who should use financial planners do, and there’s… a great opportunity come from the banning of commissions and the increased transparency, getting confidence into the sector, getting people to understand more about the role financial planners play because I think there’s been focus too much, I think, investment performance, and issues like that. I don’t know a financial planner who can control the market or tell you what the markets doing day-to-day, but it’s more around the actual advice and planning and strategy and discipline that planners bring. That’s what consumers who use financial planners through the GFC found, and that’s why it was such, I think, a strong market in Australia compared to the rest of the world.

How can we keep down this path and use the reforms to lift confidence as well as make changes?

PERKOVIC: I think, on the general theme, if you think about rebates and where platforms sit, I know that we’ve engaged with Treasury and the government to talk about kind of what these payments bring to financial planners and their networks. So I think, over certainly the years when I ran an advice business and negotiated the payments, it actually did reduce the cost of advice to clients, and I think that’s what’s forgotten. So the transparency of the big players, like BTs, Colonials, you know, AMPs, we’ve got the systems that show that transparency, and ultimately reduce the cost of advice to clients. So I just want to make sure that that’s highlighted.

Now, I think, broadly, just coming back to, I think, your comments that you made at ASFA, comments that you made today about working with the industry and working with the government, as an industry I think we’ve got to show a bit more unified position together, so it’s not retail up against industry. It’s one industry, and it’s superannuation, and we are many parts and we service different clients, and I think, instead of kind of attacking each other and criticising different value propositions that we bring, ultimately that will help confidence be restored back to the consumer.

SHUTTLEWORTH: This is all about restoring confidence in the system, and quite often I hear people throw lines out like volume-based payments. For me, it’s coming back to the policy objective of eliminating conflicts in remuneration structures, and our view is that the biggest potential point of conflict is between the adviser and the investor. So the ban on commissions, the fee for service makes really good sense.

The conversations we’ve having with Treasury, that I think are really important is not to end up in a structure where you have what we would regard as normal business-to-business-based payments; for example, and Count are a client of ours, where we’re providing administration services and they say, “Look, we’ve $6 billion, we expect a cheap price,” and whether you give it to them as a wholesale price or pay a rebate, it’s paid on total funds under administration and doesn’t actually impact the individual advice being given.

So we’ve been quite encouraged through the conversations we’ve had, but I think it’s a really important distinction because people just throw labels at things and assume they’re all bad, and I think we’re it’ll end up – what I’m hoping – is there’ll be remuneration structures that people say don’t create conflict, and there’ll be some practices that need to be tidied up because they’re not transparent, but it’s just taking the time to work through that so we don’t have these unintended consequences.