Stephen Jones

The government response to the Quality of Advice Review will eliminate redundant layers of regulations, but the Minister for Financial Services Stephen Jones believes more will need to be done beyond the review’s proposals and experience pathway to fix accessibility.

Speaking at the Brisbane breakfast of the QAR roadshow, hosted by Conexus Financial in partnership with Allianz Retire+, Jones said he wants at least some of the policies to be put in motion in 2023.

As noted at the Sydney breakfast on Monday morning, Jones aims to make some progress outside of the legislative process, but has asked the profession for patience as any move that requires legislative change will take time to go through the Parliament.

“I am absolutely committed to ensuring we pick and run with the recommendations of Michelle Levy’s important review, in addition to a bunch of other things we have running in the sector,” Jones said, although there is no intention to implement Levy’s proposals which were released last month in full.

“To the advisers in this room I give this commitment: I want to make sure this year of action and completion on a whole bunch of stuff which is making your job harder to do.”

In addition to expressing interest in reforming the Statement of Advice process, which was noted on Monday, Jones hinted at acceptance of Levy’s proposal to simplify fee consent disclosure requirements, as well as removing the safe harbour steps.

“A whole bunch of other stuff that is driving you as professional planners nuts, whether it’s the multiple authorisations that you have to receive depending on your origin of where an income stream comes from when you’re signing up and renewing somebody that’s receiving personal advice,” Jones said.

“There’s some no brainers we have to move onto there, so my commitment is that we move on those things.”

Looking at safe harbour “as a lawyer,” Jones said safe harbour isn’t working as intended.

“It’s just morphed into a tick-a-box, form-filling procedural exercise – the people it’s supposed to protect, don’t want it,” Jones said.

Poker face

Conexus Financial founder Colin Tate, who has been hosting the Q&A sessions, made his prediction on what Jones is thinking based on two of the three days of interactions with the Minister.

“My read on that – and Stephen is probably not going to want to agree or comment – is that best interest duty will remain, there will be new flexibilities for super funds… for simple [advice] and guidance on the mass end, but there will be some new rules to make digital [advice] more possible and deliverable,” Tate said.

Jones has avoided making any firm commitments as he would like to continue the consultation process throughout the industry in the coming months, as well as gaining confirmation from cabinet.

“Look, I’m not going to be drawn on the final statutory forms, but I think I’ve given you a pretty clear indication on where I’m driving on this,” Jones said.

“Let’s solve the one problem once and make it easier for professional advisers to do the job that we need you to do.”

At a Conexus event last December, Jones said he didn’t believe the banks – particularly the big four banks that drew the ire of the Hayne Royal Commission – would return to financial advice.

As noted by Tate that the major banks still had private wealth businesses providing advice, Jones said he should’ve been more precise with the comments he made last year.

“I can’t see the banks getting back into the businesses they just recently sold off – I can’t see them getting back into life insurance either for that matter,” Jones said.

“If they come up with a new business model dependent on a future regulatory arrangement, it’s not for the government – outside of competition considerations – to interfere with that.”

Trust the process

Repeating his comments from Monday morning, Jones said he intends the advice review response to be a “whole of government approach”, which is critical to the style of government Labor intends to run.

However, he said the advice review response and experience pathway will not be enough to solve the issue of accessibility to financial advice.

“In sorting out the stuff that is around the needs of legitimate concerns of the profession, let’s not kid ourselves that we’ve solved the advice conundrum,” Jones said.

“Yes, we will ensure is advice is easier and more effective and efficient to give, but I don’t think we’re going to double the number of advisers over the next five years.”

Jones encouraged advisers to reach out to non-government senators to encourage them to support passage of any future legislation related to the advice review.

“If a problem currently exists in a piece of legislation, we have to get legislation drawn up and through two houses of Parliament to make that happen,” Jones said.

“That’s why I can’t immediately click my finger and make that happen. I’ve introduced bills into Parliament in October last year that still aren’t through and aren’t likely to get through until June this year.”

He noted that a wholesale acceptance of Levy’s proposals would take a similar timeline.

One comment on “More than QAR and experience pathway needed to solve advice: Jones”
    Glenis Phillips

    I attended yesterday’s meeting and was pleasantly surprised and I believe, Stephen Jones is trying to do his best for a very complex issue. One comment by Tate surprised me. He said that one major advice provider was waiting for the final process to be completed and then deciding if the company would go to Digital Advice, which is usually referred to as Robo-Advice. Although there was a lot of hype about Robo-Advice, it was never embraced by the public. A better solution may be for advice companies to consider some of the great products being developed by the Fintech industry to solve the problem of providing affordable advice. My company is one of those Fintechs, developing a product called Advice Online. Read about it in the Financial Mappers blog section. It is automated advice but with the insights of a real person – the financial adviser.

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