Senator Jane Hume has earmarked the proposed adviser disciplinary body as being a crucial step in the industry’s march to professionalism, along with the continued adoption of scaled or ‘single issue’ advice and further adoption of fintech to drive down costs and increase efficiency.
Speaking on the inaugural Conexus Institute’s Exploring Big Ideas webinar, the Assistant Minister for Superannuation, Financial Services and Financial Technology singled out the single disciplinary body plan – which has superseded the government’s earlier ‘code monitoring body’ idea – as key to the industry’s resurrection.
“The advent of a single disciplinary body… that is going to be a turning point in this industry,” she said. “It will give a lot of certainty as to how [advisers’] code is monitored, but also to how they are disciplined… and what the expectations are for their professional behaviours.”
Hume said the industry’s transition to a profession was a “tough one to make”, but that the difficulty was due to its roots rather than the character of people involved.
“The vast majority of people I’ve met in financial advice are extraordinarily goodhearted and wise and judicious in their decision making on behalf of others,” she said. “But maybe because of the history of the profession – it came from a sales background and is now moving to a profession – that’s going to be uncomfortable to some.”
When asked by the session host, Conexus Institute CEO David Bell, how to fix the advice gap between those that have access to affordable advice and those that don’t, Hume was quick to cite the need to reduce the compliance burden.
“We probably need to bring down the cost by making financial advice simpler,” she said. “People talk to me about an 80-page statement of advice, that’s kind of crazy stuff.”
Regulators, policymakers and industry also need to look more acutely at scaled or “single issue” advice, Hume continued, just as ASIC did with superannuation early-access advice near the start of the pandemic.
“So many financial advisers really stepped up on that one particular issue,” she noted, adding that the intention was to “leverage” that willingness into more single-issue spaces.
The Senator repeated a common refrain for more input from fintech into financial advice, but steered away from any indication of whether the government believes institutions or super funds were considered as “natural homes” for advice.
“I don’t think that’s for the government to say, I think that’s a role for the private sector,” Hume stated. “The government doesn’t like to shape an industry like that, it should be demand driven so I wouldn’t want to be too prescriptive.”