The Coalition will create a “deregulation taskforce”, largely revoking unpopular reforms from its previous term of government with the aim to grow the industry to 30,000 advisers.
In an announcement over the weekend, Shadow Treasurer Angus Taylor and Shadow Minister for Financial Services Luke Howarth said the Coalition would review ongoing fee arrangement laws and life insurance commission levels, as well as reforming the education standard – all policies that came into place the last time they held government.
“A Coalition Government will rebuild the advice industry and make it a more attractive profession by reducing red tape and compliance costs to bring the number of advisers back to a sustainable level,” Taylor said.
The promise for a deregulation taskforce comes as the Financial Advice Association of Australia and Financial Services Council both supported a “razor gang” to cut red tape.
The Coalition would also aim to make it easier for accountants to provide advice, while also repealing reforms brought in the Albanese government that was a response to the PwC tax policy confidentiality saga.
Howarth and Taylor acknowledged they’ve set an “ambitious” target to rebuild the advice industry back to 30,000 advisers, but this target will be embedded in ASIC’s Statement of Expectations.
“[It] will serve as a guiding principle, ensuring financial advice regulation must be focused on reducing costs, building the industry and ensuring Australians have access to affordable advice,” the announcement said.
“Setting a target also acknowledges the collapse in adviser numbers and replacement rate over the last decade due to regulatory changes from successive governments.”
The number of registered financial advisers sat around 28,000 at the start of 2019 before the final report of the Hayne royal commission, but the combination of reforms from the aftermath of the commission along with the Coalition’s attempt at implementing professional standards has seen adviser numbers drop to around 15,600.
Over 11,000 advisers departed the industry before Labor returned to government after the 2022 election. Howarth had apologised to the advice community for the missteps it had taken when it previously held government, during a speech at the Professional Planner Advice Policy Summit earlier this year.
Taylor announced to the National Press Club earlier this month a Coalition government would introduce an omnibus financial services bill, which included a vague reference to financial advice, within the first 100 days of taking office.
The Coalition has promised to introduce the Quality of Advice Review recommendations in full, continuing a commitment it has long held since being in opposition, with the announcement further adding this will be part of the legislation due in the first 100 days.
The announcement didn’t say whether it would take on any of the draft legislation released by the Albanese government in March, which largely focused on the replacement for Statements of Advice and the expansion of intrafund advice.
Labor’s draft legislation has also raised concerns over the boundaries of what advice super funds can give, particularly the new class of adviser which was once known as “qualified advisers”.
The Coalition said any reforms it would make to broaden who can provide advice “do not undermine the role of fully qualified financial advisers” and are competitively neutral, which may put it at odds with the QAR final report which recommended allowing non-relevant providers to provide financial advice.
Howarth and lower house MP Bert van Manen had also introduced their own SOA replacement draft legislation last year, but the announcement offered no indication if this would be used by a Dutton government.
A future Dutton government was also committed to “urgently fixing” the Compensation Scheme of Last Resort and reviewing the level of life insurance commission, the latter being another policy brought in by the last Coalition government.
The Life Insurance Framework capped upfront commissions at 60 basis points and ongoing commissions at 20 basis points, and has largely been credited with eroding risk advice, and would also run contrary to the QAR which recommended keeping the current cap levels in place.
Following from the Albanese government’s plan to expand the education standard by broadening what is considered a relevant degree, the Coalition said they would similarly reform education.
Howarth and Taylor also promised the Coalition would provide financial advisers access to the ATO portal, which has been another core tenet on the FAAA’s policy wish list.
Howarth said financial advice reform has been an afterthought for the Albanese Government and the “botched” rollout of the CSLR has been a “costly disaster”.
“Successive governments have piled on layers of new regulation and it is time for a new approach which reduces costs and supports the growth of the industry,” Howarth said.
