The federal opposition has accused the government of lacking a clear vision for financial advice reform.
Speaking at the Retirement Conference, co-hosted by Conexus Financial and the Conexus Institute, Shadow Assistant Minister for Treasury Dean Smith said too many Australians have been cut out of access to financial advice for too long.
“The Coalition commissioned the Quality of Advice Review with a view to changing this,” said Smith, who represented Shadow Treasurer Angus Taylor at the event.
“Labor’s announcement in June this year that it would adopt some of the review’s recommendations seemed an encouraging start, but viewed but viewed from any angle, the staggered approach from the Albanese government is disappointing considering the pressing need for reform.”
The criticism comes weeks out from the Conexus Financial Politics Series in Melbourne on Monday 28 August, at which Taylor and Finance Minister Jane Hume who will dissect the government’s response to financial advice reform and present the opposition’s alternative financial services policy platform
The Hayne royal commission recommended an independent review be held to examine the effectiveness of financial advice reforms, with Allens partner Michelle Levy appointed review lead by Hume, then Minister for Financial Services in the Morrison government.
Hume’s successor, Minister for Financial Services Stephen Jones, has said the government will accept 14 of the review’s 22 recommendations “in full or in principle”, while subjecting the remainder to further consultation. But Smith said the government’s response and progress since had been insufficient.
“Especially given the review’s author has stressed this will change very little for the accessibility and affordability of advice,” Smith said.
“Crucially the need for a fifth round of consultation indicates Labor still lacks a clear vision on the future of financial services in Australia. Given the current economic climate, it’s particularly concerning that Australians of all ages experienced these issues while Labor attempts to find its way to reform.”
Jones has previously argued, only months ago, that “previous governments” rushed reforms.
Ganging up
A central theme of the Retirement Conference was implementation of the Retirement Income Covenant. Regulators APRA and ASIC and the government have been critical of the trustees inability to implement what is the obligations required under the regime.
Smith endorsed the regulators’ work in prioritising enforcement of trustee obligations under the covenant, which was legislated by the Morrison government.
“The previous Coalition government’s ambitions for the Retirement Income Covenant were clear – it required trustees to have a retirement income strategy outlying their plans to assist their members in retirement,” Smith said.
“At the time of the passage of the legislation it was said that trustees knew the covenant has been coming for more than three years and it was expected the industry was well place to deliver. ASIC’s finding that so far showed a lack of progress and insufficient urgency are appropriately scathing.”
At the conference, APRA deputy chair Margaret Cole told trustees they may need to consider moving members if they can’t sufficiently service retirement needs.
‘Driest of the dry’
Smith also spruiked the benefits of the Australian Law Reform Commission inquiry into the simplifying the Corporations Act due in four months’ time.
“Also commissioned by the Coalition, the inquiry is intended to create an achievable pathway towards a regime that is more adaptable, efficient and easier to navigate,” Smith said.
“The inquiries most recent interim report found the complexity and poor structure of the current legislation makes it difficult to work with and to understand, increasing the time, resources and costs needed to comply with it. Successful compliance is unsurprisingly less likely as a result.”
Paraphrasing the interim report released in June, Smith repeated the necessity to implement the changes as soon as possible.
“The interim report found the sooner reforms are made to existing regulations, the simpler they will be to implement and delays and expenses associated with remaining ad hoc legislation can be avoided,” Smith said.
“While perhaps representing the driest of dry issues in financial services regulation, this inquiry is a seminal step towards reform and the presentation of the final report will be a key event.”
For more information on the Political Series lunch or to register, visit here.
