Minister for Financial Services, Stephen Jones, has signalled providing a safe environment for superannuation fund members and managing conflicts of interest remains a priority as the Quality of Advice Review (QAR) opens the advice arena.
Speaking on ABC Radio Brisbane, he called super funds “a likely candidate” to help everyday Australians manage their money following widespread departures in the adviser industry.
Based on recent numbers, at the start of the new financial year, there are 15,584 financial advisers in the market.
“I’m working out how can we get more advisers into the industry, but also how can we get more information and advice? So I’m looking at superannuation funds as a likely candidate,” Jones said.
Along with reducing the red tape in providing advice, the second item on his agenda is how to safely provide an environment where super funds can provide information to their members.
In the government’s formal response to the QAR in June, it said restrictions on collective charging will be amended to allow super funds to provide more retirement advice and information to their members.
Additionally, superannuation trustees will be provided with legal clarity around current practices for the payment of adviser service fees and accept in principle recommendation 7 around deduction of adviser fees from super.
Jones explained: “They stopped doing it in large part because of the reforms put in place over the last decade. We do have to ensure that we’re managing for conflicts of interest. So, [we] don’t want to see a situation where someone is getting a commission for providing advice to somebody to buy a product from a super fund that they work for.
“We’ve got to work through all of those conflicts to ensure that information and advice are being given by a fund that’s absolutely in the interests of the person who’s receiving it. And that’s what I’m dealing with the profession and with super funds and with regulators and consumer groups at the moment.”
He observed that, given the rising popularity of finfluencers on social media who provide free but unlicensed advice, the objective of advice reform is to “ensure people can make good decisions”.
“My objective [is] ensuring that people can make good decisions because they have good information and they’re not going to Instagram influencers who have no licence, have no knowledge, have no qualifications, and are providing broad and sometimes dangerous information to people,” Jones said.
The minister adds there is a need to professionalise the advice industry after the GFC, “a number of spectacular collapses”, and really poor behaviour by some advisers.
“We’ve got to put in place new standards. We’ve got to ensure we lift the bar,” Jones stated.
“We didn’t do that just once. We did that about four times. So, the royal commission came along and we lifted the bar, put in place layer after layer after layer of well-meaning regulation, which was all designed to protect consumers from bad advice.
“But what it’s done, it’s also protecting consumers from good advice because there’s just not enough people and not enough avenues to get the advice and that’s what my job is to fix.”
