Further ASIC levy relief hasn’t been ruled out by the government, but with more work to be done on the Quality of Advice Review response, it is unlikely to be a priority.
At a Financial Services Council event in Sydney on Monday, Professional Planner asked the minister why the levy was being raised at the same time the government was trying to combat the rising cost of advice with the QAR. Jones said it would have sent “all the wrong signals” to continue the freeze, which was brought in by the former government during the COVID-19 pandemic.
“We have industry funding models for both of the regulators and that won’t change,” he said.
“I will look at it, but I don’t want to say within the current round. It’s just bandwidth, mate. So many things we can deal with in any point in time.”
The ASIC levy freeze was ended after a review of the regulator’s Industry Funding Model, which will see the advice industry charged a flat fee of $1500 per licence plus a graduated component of $3217 per adviser.
The comments come off the back of a national roadshow by the FSC and other members of the Join Associations Working Group in regional Queensland, during which Jones was peppered with questions about the levy.
Help me help you
While the government has maintained its commitment towards pursuing some of the QAR changes it announced last month, Jones said some of the issues in the industry come from outside what is enshrined in law.
The QAR recommended streamlining fee consent into one document, rather than individual ones, which FSC chief executive Blake Briggs noted many of the associations have been working together on.
“If you guys get your act together on this standard stuff it’ll make a lot easier for us to do what we want to do which is have a single point of concern,” Jones said in response.
The minister made a similar edict to the industry for Statements of Advice, noting the growth of the documentation has come organically rather than from legislation which will complicate the legislative approach.
“A lot of the additional documentation that has come forward over the last decade hasn’t been driven by Parliament,” Jones said.
“You might say the regulator is the ‘baddie’ and they’re the ones that have provided these really complex regulatory guidance documents that you’ve got to comply with… but what are your own legal departments requiring to be written in these SOAs as well and how much is that driving the volume of documentation? There’s a challenge for all of us here.”
Part of the government’s QAR response will include industry consultation on what the future SOA should look like.
“If you want your mum or dad to go off and explain to another family member or yourselves what they’ve agreed to, what would that look like? I think you’d get something a lot less than 110 pages,” Jones said.
“There will be interests through the business that needs to be met through their risk appetite which will be low, and the interest of the consumer.”
On the clock
The minister told the Conexus Financial QAR Roadshow in March that minor changes could be implemented this year, but any legislation wouldn’t be introduced until next year, much to the frustration of industry attendees.
“I don’t have any flares going off at the moment telling me that we’ve got a big problem here and we’re not going to be able to meet those timelines, except the Office of Parliamentary Council tells me I’ve well and truly exceeded my slots for work they can do this year,” Jones said.
Briggs quipped that the minister just needed to push through that feedback from public servants and forge ahead with his response to the QAR.
Jones listed other legislation he’s introduced this year, including bills for buy now/pay later reform, consumer fraud, and the experience pathway.
However, he reiterated the government’s commitment reforming the sector. “You’ve got a government that wants to move this stuff along,” Jones said.
“You do not want this to be a love child of an individual minister or an ex-minister. You want to this to be government policy, that way everyone is locked in, and you can move it forward.”
He added the government is trying to solve the current problems in the industry, but with an eye to the future, noting it would be impossible to predict what future products and innovations while appear later.
“It would be the height of arrogance for any government to say this will be the last time anybody has to look at this stuff because it won’t be,” Jones said.
Speaking of bandwidth
While the minister has been criticised for wanting to expand intrafund advice, Jones said this will open the door for entrants into the industry.
“A benefit, but not an objective of fund-based advice, is getting that scope of competence for the people providing that advice,” he said, adding those people might upskill and become independent advisers later.
While in regional Queensland for the JAWG roadshow last week, Jones recalled his experience of the advisers he met with and how many chose to become a financial adviser straight after high school or university.
“Not one of them said they got here because they made that decision as an undergraduate,” Jones said, adding many of them came through commerce or accounting degrees and started working for the banks.
Jones added he wanted to open more doors at the university level which meant recognising components of other degrees as a pathway into the financial advice profession.
“At the moment there are two universities in Australia that are offering a financial advice degree,” Jones said. “We’re kidding ourselves if we think that’s going to do it.”
“There’s a pathway through to growing that 16,000 to a corpus of 30,000 but we’re not going to get there in two years or five years’ time.”
Really? You’re telling me that with all the money paid to ministers to govern, they can’t handle more than one issue at a time?… Is there no such thing as multi-tasking with the Government? This is such a huge issue for most advisers as this cost has to be passed on, another instance of government policy failing everyday Australians.