Stephen Jones

While draft legislation for the Quality of Advice Review “quick wins” is imminent, the government is still finalising specific policy details for Stream 2 which is focused on super fund advice.

Speaking at the AFR Super & Wealth Summit by video link from Canberra on Tuesday, Minister for Financial Services Stephen Jones said the intention is to have draft legislation ready in “the near future” that will allow industry to consult on the technical details of the reforms.

“While that’s going on we’ve been engaged in deep consultation around the scope [of advice], the training and competency [of providers], and charging arrangements of advice to be provided within funds,” Jones said.

“We’re well advanced in that project and the government has some policy decisions to make in the near future as well with a view to having some concrete stuff for funds, consumers and others to pore over – and technical and legislative detail to pore over – in the first quarter of next year.”

Picking up responsibility for the QAR after winning the federal election last year, the government launched a consultation on the recommendations in February, followed by the government response in June which would seem reforms implemented via three streams.

While Jones was vocal about the quick wins in Stream 1 – which focused on red tape reduction for advisers – he noted in March that he didn’t expect to “get a slot in the legislative agenda” this year.

“We want to push this along really quickly,” Jones said. “Because you can’t say we’ve got a 5-million-person problem and then be dragging your feet on a big part of the solution of the problem.”

However, despite the sense of urgency communicated by the minister, his comments also dashed some hopes and expectations that the government would release draft legislation for the so-called “quick wins” elements of the QAR in October, based on some of his recent comments.

Super special case

Although the QAR recommended super funds and other institutions should be allowed more regulatory flexibility for giving advice, the government’s decision to only use funds as a test case raised eyebrows and concerns in the advice community.

Super funds – which have been notoriously focused on accumulation – have struggled with member services and decumulation, being called out by Jones, APRA and ASIC for underperforming in their obligations to give members a retirement strategy as required by the Retirement Income Covenant.

“The first thing is to say is it possible for us to celebrate the great achievements of our $3.4 trillion industry and they have been many [and to] celebrate what a great job we have done in growing member wealth, but at the same time as saying much, much more needs to be done,” Jones said.

He noted that after spending much of the year putting funds on notice, he has no intention of repeating that over the next year.

“We’ve assiduously gone through and looked out where government needs to work with industry to ensure that we are making it easier and facilitating the ability of funds to provide greater services to their members and we’ve identified the area of advice and information as being one of them,” Jones said.