The Coalition will take all 22 Quality of Advice Review recommendations to the next election and says giving a “carve-out” to allow super funds to give more advice, but not other institutions, will create an unlevel playing field.
Speaking at a Conexus Financial Political Series lunch, in partnership with BT in Melbourne on Monday, Shadow Treasurer Angus Taylor said QAR lead Michelle Levy delivered a “blueprint” to the industry and called on the government to provide a full timeline for implementation of the recommendations.
Minister for Financial Services Stephen Jones announced in June he would accept 14 of the 22 proposals, with advice red-tape reduction being the highest priority, along with expanded boundaries for the provision of advice from super funds.
Jones, along with Prime Minister Anthony Albanese, had committed to the commencement of QAR-related legislation next year.
“No carve-outs, no entrenched regulatory advantages,” Taylor said, referring to the preferential treatment super funds had been given over other institutions to give advice.
“We’ll support bringing forward elements to support and reduce red tape in the short term, but we want to see that full agenda brought to the table and a focus on this government getting on with the full job that Michelle Levy laid out in her review.”
Asked whether the Coalition would take all 22 recommendations of the QAR to the next election, assuming the government stuck to its initial 14, Taylor said the Coalition would do whatever it took to achieve the goal of more access to advice.
“We’re committed to the full 22 and an appropriate timeline for that,” Taylor said.
Jane Hume, the former Minister for Financial Services and now Minister for Finance added that Levy did an “exceptional” job in her review.
“She came up with a suite of recommendations that work together,” Hume said. “If you cherry pick, unfortunately, they won’t work together to deliver what it is that we want.”
Taylor said there is a serious risk of a large cohort of Australians being under-advised ,which has the potential to seed “the next crisis”.
“Let’s anticipate it, let’s get ahead of the game,” Taylor said. “To avoid being under-advised let’s create a testable, customer-focused, professional sector that can work through multiple channels. But the personal advice channel will always be the leading channel.”
Slow timeframe to reform
Jones has faced criticism from the industry for taking a slower approach to reform than anticipated before the election, when he said there would be issues to fix “on day one”, and has since said the previous government “rushed” its reforms.
Hume said the Coalition is disappointed to see the “go-slow approach”, particularly for the later streams of the QAR, including allowing other institutions to get into advice.
Additionally, Hume said she was not satisfied with the government’s dismissiveness of Levy’s “good advice” recommendation.
“‘Good advice’ will be advice that is fit for a customer’s purpose – you know what good advice is because you give it every single day,” Hume said.
“The [government] should be able to walk and chew gum at the same time. It is expected of them. The delay on a lot of the other recommendations creates uncertainty for the industry that is crying out for stability of policy settings after a considerable period of flux.”
Long road to stability
Hume, who was the last face of the Coalition’s implementation of changes to advice profession, took criticism from local advisers over changes to professional standards and grandfathered remuneration.
However, she remained adamant that the industry has changed for the better.
“When I started working in this industry…it really was a place for cowboys. It can’t be a place for cowboys,” Hume said.
“I understand that there were people that were very upset about the transition and felt uncomfortable with it, whether it be educational, whether it be remuneration, whatever it is. But the place the industry is in now has allowed to us to say how can it best serve the people that need advice the most?”
Asked what a future Coalition government may implement in the advice industry outside of the overlooked QAR reforms, Hume said there wasn’t anything on the horizon, as the major reforms have either been completed or are in motion.
“What your profession needs is stability now, you’ve been through the hard yards,” Hume said.
“Now we want to make sure you can do the job that you’re best at, which is dealing with your clients and giving them the best advice that allows them to accumulate wealth.”
However, Hume clarified the door was still open for future reforms if the circumstances changed.
“You never know what is going to crop up in the future, new products [or] problems, but we were always on a journey where we wanted to get to where we are now,” Hume said.
“The people in this room are professionals, the people in this room are educated. They are doing what we need them to do, because quite frankly, your objectives are entirely aligned with ours.”
Taylor added the sector has been through tectonic changes and the QAR offered a pathway forward to stability.
“We have to get both sides of politics behind implementing those recommendations on a clear timeline and give you the stability to get on and do what you do best [which is] to serve your customers,” Taylor said.
The best thing for the advice industry would be for Jane Hume to be ignored. The damage she inflicted during the Morrison/Frydenberg government will be ongoing for years, if not decades.