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Draft advice legislation too late says Opposition

Mike Taylor15 November 2023
Clock losing time

The Federal Opposition has sought to blame the Government for the level of the Australian Securities and Investments Commission (ASIC) levy.

Reacting to the Government’s exposure draft release of the first tranche of legislation resulting from the Quality of Advice Review (QAR), NSW Liberal Senator, Andrew Bragg, claimed that on the watch of Assistant Treasurer and Minister for Financial Services, Stephen Jones “financial advisers have been hit with the largest tax increase in living memory”.

“This year, Labor has increased levies on financial advisers from $1,100 to $3,200 per adviser – a $180% increase,” he said.

“Financial advice has never been so unaffordable and it’s getting worse, Bragg claimed.

As well, he suggested that the Government had dragged its feet on the legislation resulting from the QAR with the result that it would likely not pass the Parliament before the next Federal Election.

While Bragg pointed to the negatives, the major industry associations broadly welcomed the draft legislation with the Financial Advice Association of Australia (FAAA) chief executive, Sarah Abood particularly welcoming the proposal to move to a single standard consent form.

“Another piece of important news for our members is confirmation that commissions on life insurance (Recommendation 13.7) can continue to be paid to advisers, with a one-off written consent from the client before the beginning of the policy,” Abood’s statement said.

“However, we are concerned that the rationalisation of Statements of Advice (Recommendation 9) and the removal of safe harbour steps from the best interests duty (Recommendation 5) have not been included in the draft legislation at this time.

“These are important elements in cutting unnecessary red tape and have the potential to meaningfully reduce the cost of providing advice. We will be seeking further clarification from the Government on the timeframe for these measures. “

Financial Services Council (FSC) chief executive, Blake Briggs said the exposure draft legislated represented a “down payment on their commitment to make financial advice more affordable and accessible”.

“The Government’s first tranche of legislation contains a modest but important package of reforms that will start to simplify the regulatory framework without reducing consumer protections, and has the support of the financial services industry.

“This modest package of changes is just the start, however, to ultimately reduce the cost of providing financial advice, which has been pushed to over $5,000 by layers of regulation and red tape.”

The Government has held over key recommendations from the Quality of Advice Review, including abolishing the safe harbour steps for meeting the Best Interests Duty and simplifying statements of advice, in favour of consultation under ‘phase two’ of its process, which focuses on retirement advice.

“It is a missed opportunity to have deferred implementing key recommendations on abolishing the ‘safe harbour steps’ and simplifying statements of advice, which would achieve the most in reducing the regulatory cost burden on financial advice.

“The FSC is pleased, however, that the Assistant Treasurer has offered a clear commitment to have a finalised Government policy position on statements of advice and abolishing the safe harbour steps before the end of the year,” Briggs said.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Canberra Collective Morons
3 months ago

Nice one LNP to try to shift blame for the Gordian Knot of mass over regulation and costs to ALP.
And now the ALP say they will help and triple ASIC levies, delay & dilute QAR.
Frydenberg’s Kill Advisers agenda gave us 9 years of disastrous BS Red Tape Regs & Costs of ASIC Levy, LIF, FARSEA, Duplicated Fee Forms, etc.
ASIC have been encouraged and allowed to Kill Advisers for 15 years, making their own disastrous BS Red Tape Regs interpretations on mass.
THE WHOLE CANBERRA POLLIE & BUREAUCRATIC BUBBLE HAVE COLLECTIVELY KILKED ADVISERS IN BS USELESS, COSTLY RED TAPE.
Stop pointing fingers and move much quicker to ALL fix this CRAP !!!!!!
https://ipa.org.au/ipa-today/red-tape-at-record-high-across-australia

Davey NoFurries
3 months ago

Based on the last 23 years of FS legislation – this is fact, cannot trust anyone in Canberra – LNP, ALP, ASIC, APRA, Treasury etc. and every conflicted interested party that feeds the $ machine. Just vote them out if they can’t do the job that the Australian Tax Payers voted and pay them to do.

Anon
3 months ago

In a recent conference Jones had the gall to suggest advisers should be reducing their fees because the government was reducing the cost of providing advice. The only change to the cost of advice provision under Jones’ ministerial tenure has been a massive increase to the ASIC levy. Everything else has been delays, deferrals, and empty promises.

Thanks to Jones’ ineptitude, the direction of financial advice fees is up rather than down.

Researcher
3 months ago

It’s a bit rich for the LNP to start pointing fingers at the ALP. There are just as complicit on the “hot mess” that is financial planning regulations, if not more.

Stuff the LNP, they stuffed Advisers
3 months ago
Reply to  Researcher

For the last 20 years of ever increasing BS mass Govt & Bureaucratic Over Regulation of Advice.
The LNP has been in power for 70% of those 20 years.
Would thus seem logical to blame the LNP for 70% of the freaking HOT MESS.

Over it!
3 months ago

A bit of a mess I’d say. Literally everything touched by a public servant gets stuffed-up. The Financial Panning Industry is just another scalp to add to that list. Reparable – I seriously doubt it! That would require self-reflection and an ability to identify error, and then implement change. I just don’t think that mob in Canberra have that capacity! Sorry…

fed-up
3 months ago

The Liberals attempt to gaslight Australians into forgetting that it was them, led by Josh Frydenberg and Jane Hume, who introduced this great big new tax.
I will never forget.

William
3 months ago

Spud Jones is way out his depth with the financial services portfolio

Davey NoFurries
3 months ago

What’s not released in the fine detail regarding Insurance Commission will be the requirement for a new Consent form for any existing Insurance Trail Commission – thank you MP Jones for the last nail in the Insurance coffin.

Wildcat
3 months ago

I think it is at commencement only, not 100% sure though. It’s to stop telephone sales I think, adding a further step in admin to reduce completion rates. This is just me speculating though. Anyone better informed on this subject?

Curious onlooker
3 months ago

Not sure about that? Did you read it, this is covered in the last paragraph of the release

Old risky
3 months ago

I support most of the activities currently being engaged in with ASIC by Senator Bragg. But Senator, your mob introduced the ASIC levy. Time for a little truth telling Senator, just to retain the balance

And your mob, Senator, allowed Josh Frydenberg’s banker mates to fund FASEA for three years with a donation of $11 million. Just like LIF, FASEA was designed with the long-term bank objective of eliminating independent (oops, can’t say that, can I) small businessmen running financial advice businesses.