With time running out in the current term of government, Minister for Financial Services Stephen Jones has told a room of super fund and life insurance executives to remain supportive of his advice reform package.
“Focus on the main the game, let’s not get distracted by things that aren’t the big issue,” Jones said at the Insurance in Superannuation Summit (IISS) in Sydney on Tuesday morning, hosted by Professional Planner sister publication Investment Magazine.
“We’ve got a limited amount of runway to land this and get it through Parliament. Let’s make sure we do it.”
After two years in government, the first DBFO legislation passed earlier this month with the government acquiescing on a last-minute amendment, to the pleasure of the advice sector, after past adversarial tensions between the advice and super sectors almost re-ignited.
But the hotly anticipated tranche one bill was rife with errors. The draft legislation initially failed to mandate fee consent forms, and there were widely derided drafting errors in the legislation tabled in Parliament.
After the bill passed, Jones said more legislation was due in the second half of the year and at the IISS event he added the next legislative package will ready soon.
“I expect Treasury to be out with some more detailed consultation around some particular aspects in the next coming weeks, but our goal is clear: expand the number of safe doors people can walk through to get the information and advice they need,” Jones said.
The government has been heavily criticised for the slow pace of financial advice reform, after Jones referred to the sector before the election as a “hot mess” that he could fix quickly.
The opposition formally announced Luke Howarth as shadow Minister for Financial Services in March and attacks on Jones’ record have ramped up in recent weeks.
“The government has heard some of the concerns about the industry about some of the legislative roadblocks to good customer service and customer expectations,” Jones said.
“The financial advice profession and legal framework, frankly, was inadequately addressed and in many instances abandoned by my predecessors. We’ve got a clear plan to fix it and we want to fix it. We’ve worked constructively over the last two years. We’ve got the first wave of legislation through Parliament.”
While the advice sector is still waiting on some of the other tranche one fixes, such as the replacement for Statements of Advice and the Safe Harbour Steps, tranche two is the government’s key pillar in expanding advice to low-account-balance clients via a second tier of financial adviser known as “qualified advisers”.
Although the “qualified adviser” moniker created an avoidable distraction during the reform process, Jones has since said the name is likely to change, and he still intends to move forward with the reforms.
“So instead of all those people calling your call centres today and receiving the response ‘sorry I can’t help you with that, you’re going to have to see someone else’, more of those questions and requests for advice can be provided by funds and institutions,” Jones said.
“It’s the right outcome. More safe doors and closing the dangerous doors.”
But while funds wait for more regulatory clearance through the DBFO reforms, Jones noted that ASIC and APRA’s recent report on the Retirement Income Covenant shows funds have only made a minor improvements in fulfilling their obligations to deliver retirement income solutions to members.
“I’m pleased to say there’s been an improvement since last year, that’s a good thing,” Jones said, in contrast to the negative tone he expressed at the same event 12 months ago.
“However, there is still a lot of work that needs to be done. There’s only incremental progress in tracking success of retirement income strategies.”
Jones said that while strong performance during the accumulation is important, it’s only half of the proposition.
“Effective drawdowns in retirement are the second half of a good retirement system,” Jones said.
“This means members need both the right products and the right advice and information to lift outcomes. I’ve encouraged all trustees to engage with the report by the regulators and to commit to action.”
I’m not sure how the Minister can refer to something as minute as the reforms to date as a “package”, but, then again, maybe he does that a lot!
It is ironic that Stephen Jones addresses a meeting titled the “Insurance in Superannuation Summit” in Sydney on 23rd July 2024 and tells everyone to focus on the main game and his Government will expand the number of safe doors people can walk through to get the information and advice they need.
Not sure how standing and watching the Life Insurance Adviser pool being decimated by this Government and the previous Governments actions and inaction to fix the real issues around the provision of quality Life Insurance advice, where thousands of the most experienced risk advisers with fantastic service and impeccable records, exited the Industry due to totally unrealistic Regulations that been proven to be wrong, shown by the resulting fiasco of plummeting New Business, skyrocketing premiums to loyal customers and virtually ZERO new risk specialists coming through the University pathway due to it’s completely irrelevant study criteria that for nearly ALL of it, has Little to Zero course relevance of the subject matter.
When you use people to come up with solutions, whose sole purpose in life is to feather their own nests by enacting legalize that not even they can put together in a sensible format and of course I am talking about the Legal fraternity, then we always end up down the same dead end street with one small exit point, straight into a maze of more Legalize and their own conclave of secret society 19th Century paced solutions that always makes it worse.
Leaving it up to Lawyers to solve problems they instigated, is tantamount to banging your head against the wall continually, with small breaks to stomp on your feet.
When will Australia wake up and recognise that the Legal fraternity ARE the problem, not the solution.