Stephen Jones speaking earlier this year.

Consultation might be used by stakeholder groups to try and flip laws and regulations they don’t like but Minister for Financial Services Stephen Jones, does not have to agree.

Jones tells Professional Planner the consultation processes on financial services regulation can be used by different individuals and groups to try to convince law makers to dump something they dislike.

He says such representations are transparent but the fact they are being made in a consultative forum during discussions does not mean the government is obligated to change law.

Jones’ remarks on the consultative process coincide with a period of angst among certain parts of the financial services sector about a proposed amendment to superannuation law that attempts to clarify how advice feeds can be charged from a super fund members account.

Some stakeholders such as the associations represented on the Joint Associations Working Group, as well as the Joint Licensee Group, believe the revision to the law would create an onerous obligation and an unacceptable compliance risk on funds related to the possible review of advice received by a fund member, but this has been disputed.

Jones says there are some people who have misread the play on that specific amendment but that comes with the territory when engaging in consultation with stakeholders as he recently did at round table discussions.

“Everyone will be coming at these things and going ‘is this an opportunity for us to wind back something we don’t like’ or, you know, get a bit of an advantage out of this by tweaking it this way or that way,” Jones says.

“I’m not critical but I see through all of those things. I’m not critical of them for doing that or trying that on but I don’t have to agree. I am looking at all of this and thinking what’s in the public interest and what is in the interest of members of funds.”

The controversy surrounding how an adviser gets paid from a superannuation fund for provide a fund member with advice is not the biggest game in town for Jones, however, because he views the work on increasing the accessibility people have to good advice as the key challenge.

He says that governments have spent the past 15 years imposing layers of regulation on the financial services sector that were a response to different crises, and that each legislated response was understandable at that point in time.

Jones points to his experience during his first term in parliament in dealing with people who had lost money in the Trio Capital collapse.

“Many of these people were blue collar workers who had worked hard their whole life and in their late 50s and early 60s they’d been encouraged out of an APRA-regulated fund into a self-managed superannuation fund, and then from the superannuation fund into these fraudulent and unreliable investment vehicles, and they lost all their money when they collapsed,” Jones says.

“It sort of seared me really in that process.”

The attempts by legislators to protect consumers from the vultures in the financial services sector has, according to Jones, meant that the pendulum has swung to far one way and that his objective was to try and reduce as much red tape as possible without lowering consumer protection.

“It seems to me that we have sought to resolve over the last 15 years to protect Australians from bad advice,” Jones says.

“We have nailed that, but we have also protected them from good advice. The objective of this next wave of reforms is to find more doors for Australians to walk through to get competent and reliable advice.”

A concern that Jones has with the regulatory creep that financial advisers have experienced over many years is that experience and qualified advisers have left the game as well as advice being too expensive for Australians.

This has led to people seeking investment advice through unreliable sources online with the result that $1.3 billion was lost by individuals in investment scams in 2023.

Jones says people providing financial advice without appropriate registrations can be dealt with by the corporate regulator when discovered but the problem with online investment scams is that they tend to be based overseas.

He says the government’s focus on investment scams online has turned to placing greater pressure on social platforms who get revenue from criminals advertising scams online.

“We’re putting a greater obligation to get their platforms clean and free of this criminal content,” Jones says.

One of the other areas Jones has been dealing with is the fallout from the PwC tax policy confidentiality breach and the government has both passed legislation and issued consultation papers that look at changing tax agent, auditor, and accounting regulation.

“It is the most significant overhaul of the regulation of these professions in decades,” he says.