Senator Jane Hume has reiterated the government’s intention to push for regulatory reform by making advice less compliance heavy and more accessible for consumers, while also giving a glimpse into her view on the community’s perception of the financial advisers.
Speaking on a panel hosted by reverse mortgage provider Household Capital, the Assistant Minister for Superannuation, Financial Services and Financial Technology said she likens financial advisers to politicians.
“People say ‘financial advisers are all shonks, except for mine, I love mine, mine’s great’,” Hume said. “Politics are the same; everyone hates politicians except their local member, who’s a good guy. Or a good girl, I should say.”
The aside from the Senator came with context; in a discussion about the importance of financial advice Hume explained how the industry has “morphed so dramatically” over the last 30 years from a predominantly sales culture to a profession.
“That’s been an uncomfortable journey I think for many of the people involved in that profession but we are moving in the right direction,” she said.
Hume then repeated what is now becoming a common refrain from policymakers and regulators during industry discussions on financial planning and retirement – an acknowledgement of the need to unwind regulation and bring down the cost to serve in order to narrow the advice gap.
“The trick now is to unravel some of the burdensome red tape in the financial sector to make it more accessible and to make it less expensive to get some basic advice,” Hume said.
“Now I think we’re getting there,” she continued. “We saw a willingness from some of our regulators during Covid-19 to remove some of those regulatory burdens. Things like getting single issue advice on something like the early release of superannuation; that was a really positive step forward. Now I think the trick is to really broaden that out. “
An ongoing poll conducted by Professional Planner asking advisers if they’ve employed ASIC’s early super release compliance reprieve revealed that the uptake has been minimal, with 92 per cent of respondents saying they’ve never used the dispensation. Six per cent said they had used it once and two per cent said they had used it more than once.
While the early release regulatory amendment may not have been a particularly effective initiative, it is a sign that policymakers are looking to make advice more accessible. The Morrison government has cemented this as a longer-term priority by asking the Australian Law Reform Commission to assess the efficiency of financial services regulation, with a final report due in November 2023.
While the iron’s hot
Hume brought up the 2.8 million people that used the early access provision to dip into their super, and highlighted the importance of harnessing that engagement to get people interested in super and more concerned about managing it effectively.
“They had never considered [super] as part of their balance sheet before,” she said. “So we’ve had a new level of engagement that we’ve never had before, and I think that’s really important for the government to leverage from.”
Hume also made the case for robo-advice as a gateway to full service holistic advice, while acknowledging that there remains too much confusion about what robo-advice really means.
“Ask ten different people what robo-advice is and you’ll get ten different answers,” she said. “But the opportunity to first engage with your retirement through something that is not necessarily personal advice or on something that is going to cost you money, is actually something that is a really good catalyst to taking people to that next stage of advice, and is something we would really like to see used more.”