Acknowledging pressure from the industry superannuation fund sector on the issue, Labor does not see intrafund advice that relies on vertical integration as being an appropriate business model in the new advice climate.
Speaking at an industry event on Thursday evening, the shadow financial services and superannuation minister, Stephen Jones, said an Albanese Government would not acquiesce to that particular demand from the industry funds.
“There’s been those from the industry funds who have looked to me and would like to see us relax some of the rules around intrafund advice – that we should allow funds to have vertically integrated arrangements,” Jones said.
“This is not a policy announcement but I’m telling you that I’m intensely uncomfortable with a model like that.”
Jones said the traditional business models no longer worked effectively for the industry.
“It would be naïve to think the stuff that was exposed during [the] Hayne [Royal Commission] was only a problem that could ever be subject to one part of the industry,” Jones said.
“We have to have other business models and modes of delivery to ensure that we get the advice piece right, but it’s absolutely critical.”
“Unfinished business” in fixing advice
After losing control of Federal Government in 2013 Labor has been left in the passenger seat, watching the Coalition drive the outcomes of the Future of Financial Advice reforms.
After spending the last nine years in opposition, critical of the Coalition’s handling of the industry, Jones said Labor saw fixing the financial advice sector as “unfinished business”.
“At a time when Australians need financial advice we should be ensuring they have access to it,” Jones said.
He stood by the decision to announce the education carve-out, which led to the Morrison Government releasing a consultation on excluding advisers with 10 years of experience and a clean disciplinary record.
“I see that as fixing up some obvious problems around recognition of prior learning and experience,” Jones said.
“If you have someone with 10 years of unblemished experience and they can go through an accredit recognition of prior learning arrangement… then frankly we need those people in the industry and we shouldn’t be booting people out the door.