If the financial advice profession wants positive change from politicians, it’s up to individual advisers to educate them about the value of advice.
This was one of the underlying takeaways from the Professional Planner Advice Policy Summit earlier this year and, with a federal election now in full swing, it’s the appropriate time for the advice community to raise its profile with candidates.
During a panel at the event, Liberal MP Bert van Manen said very few people and organisations are currently communicating the value of the profession effectively. As a former risk adviser who joined Parliament as the Member for Forde in 2010, van Manen said he does not think the financial advice industry sells its value proposition well at all.
“I’m one of the few people up on the hill who actually understands what you guys do, and I have very few advisers or people in the industry come and see me on a regular basis to discuss these issues,” van Manen said.
The issues in financial advice don’t make daily front page news in capital city newspapers or lead the political coverage on the 6pm nightly bulletins. In the national political debate, it’s not going to gain airtime between the cost of living and housing crises, immigration, tax reform, managing the relationship with US President Donald Trump, and submarines.
Advice reform flies under the radar of the broader public and the decisions made aren’t a big enough priority to swing an election for the average voter. But that doesn’t mean the advice community can’t have an influence over political decisions, and individual advisers should be doing more to communicate their concerns to their local members.
Nathan Rees, who was once NSW Premier and is still an influential powerbroker for the Australian Labor Party, and who is now head of external affairs and public policy at Metlife, told the summit that advisers could do a better job communicating the value of financial advice.
“Any good MP wants to hear from people on the ground who are actually in the sector, because the alternative is only hearing from the regulator or Treasury,” Rees said.
“You ring them up, you say I’m going to send you an email requesting a meeting. I want to talk to you about the issues of the day and financial advice or insurance. Follow up the phone call, and nine times out of 10 you will get through the door, right?”
‘The squeaky door gets the oil’
Asked at the summit how the industry can engage more effectually to get better legislative outcomes, former Federal Treasurer Joe Hockey said the profession needs to be its own activist.
“The squeaky door gets the oil,” Hockey said.
The evidence shows how direct action works: One Nation Senator Pauline Hanson secured a motion to launch an inquiry into the collapse of Dixon Advisory, while Teal Independent Allegra Spender acknowledged – via feedback from her electorate – there is an “urgent” need for advice reform. Without hearing about these issues directly, neither of these politicians would have been aware of these longstanding problems.
Minister for Financial Services Stephen Jones even suggested, as far back as 2023 during the Professional Planner Quality of Advice Review Roadshow, that advisers should reach out to non-government senators to gain support for the speedy passage of any bills.
The Financial Advice Association Australia launched the Federal Election Hub yesterday to help inform the advice community where each candidate stands on the five core policy positions it is advocated for this election.
For better or worse, financial advice has avoided the often grim spectacle of policy debates played out in public. As former Treasurer Hockey said at the summit, the voice of the critic is much louder than the voice of the advocate.
“You can be standing on the biggest pulpit and advocating for something and you get drowned out,” he said. “It’s impossible to run a debate in public that will facilitate change.”
Begrudging choices
Jones has delivered some wins for the industry – including the experience pathway and aspects of advice reform – but has ultimately failed to implement changes that would drive down the cost of holistic financial advice. The steeply rising cost of industry levies has outpaced the savings from red tape reduction.
Over a full term the Albanese Government has overpromised and underdelivered on advice reform, and in many advisers’ eyes it remains beholden to industry fund interests. But if Labor has disappointed, the Coalition for its part on any metric also botched advice reform during, its time in government.
The aim of professionalising the industry was and remains worthwhile, but the combination of introducing professional standards along with recommendations from the Hayne royal commission created a messy cross-stream of reforms.
Onerous and reactionary safeguards were introduced to mitigate misconduct that was already largely being stamped out, creating a culture of focusing on rigid compliance requirements, not on allowing individual advisers to exercise professional judgement.
The tenure of former Minister for Financial Services Jane Hume saw some band-aid fixes – including extensions for completing the degree standard, multiple time extensions for completing the adviser exam, and freezing the ASIC levy – but those were never material, long-term fixes for the industry.
At the Advice Policy Summit, Howarth apologised for the mistakes made by the Coalition, ultimately conceding they had fumbled advice reform. He’s not the first shadow representative in the past three years to do this – Stuart Robert also conceded there had been mistakes made by his party.
In the eyes of many, this is the political equivalent of umpires conceding the next day they made the wrong call in the dying minutes that swung the result of the game. But the difference now is that if the Coalition wins on 3 May, it will be presented with a chance at redemption and to take another swing at advice reform out from under the shadow of Commissioner Kenneth Hayne.
But whether the Coalition gets its redemption chance or Labor gains an extension to achieving its own goals for advice reform, one thing will remain unchanged. Whoever is in power, there must be a never-ending stream of advisers knocking on the doors of every MP, educating them on and advocating for the value of a strong advice profession.
