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Banks, insurers back into advice

Mike Taylor7 December 2023
Street signs past, future

After flagging its intentions yesterday, the Government has today formally outlined its intentions around financial advice including a new class of financial advisers to fill the advice gap.

While life insurers and superannuation funds were yesterday welcoming the Government’s initiative ahead of the move, the Assistant Treasurer and Minister for Financial Services, Stephen Jones, described the new class of of advisers who he said would be required to meet education standards, be focused on providing advice on simple matters, and be prevented from charging a fee or a commission.

His announcement said “These changes will apply across all financial institutions, including superannuation funds, life and general insurers, and banks. It is expected that this new class – to be termed ‘qualified advisers’ – will generally be employees of licensed financial institutions. The licensee will be wholly responsible for the advice provided.

“Importantly, all advisers will be subject to the same standard under a modernised best interests duty. This will give consumers confidence in the advice they have receive from the expanded, regulated advice environment.”

“The new model will:

Modernise the best interests duty to ensure customers receive helpful advice, including on single issue or limited scope issues, at a high standard

Replace statements of advice with a record that is in plain English and provides helpful information to make an informed decision

Introduce a new class of financial advisers who can provide advice on simple topics, while being subject to the modernised best interests duty

Given the unique obligations on superannuation funds and the need to drive engagement with members, this model will also:

Clarify the topics that superannuation funds can charge for advice on and the circumstances they can consider

Allow super funds to provide helpful ‘nudges’ to members to drive greater engagement with superannuation at key life stages.

Legislation will be developed to implement this model in 2024.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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one foot out the doora
2 months ago

I think we’re all going to need a dose of pragmatism to get through this.

Musing
2 months ago

and a life jacket – there is a lot of water to go under the bridge between now and end 2024

Neil
2 months ago

You could not make this stuff up. Absolutely ridiculous. What a farce !

ossirhC
2 months ago

Disgraceful.
Let’s start the countdown to the next Royal Commission

RC 2.0 here we come
2 months ago

Jonsey says “new class of advisers who he said would be required to meet education standards, be focused on providing advice on simple matters, and be prevented from charging a fee or a commission”.
What education standards? A 3 day PS146 course that everyone in Government has said for a long time is completely unacceptable.
Prevented from charging a fee or a commission? Thus they are paid via Collective Charges = HIDDEN COMMISSIONS = Most Members paying Hidden Commissions for No Service.
Or do these Insto Advisers not get paid ? They must be a volunteer service – WTF

Get on with life
2 months ago

So what was the point of the Farsea Exam.

Worn out
2 months ago

The purpose was to cull financial advisers and create a shortage so that the industry funds could do what they announced yesterday. It is obvious that this was their strategy from the Start.

Chris
2 months ago

These are terrible developments for the industry. Essentially, banks , super funds and life insurers will have “advisers” who can’t change a fee so are pure product sellers. And there will be less safeguards for the consumers.
The laughable AIOFP have sorely let down their members by kowtowing to Stephen Jones to the extent they have.

Confused
2 months ago

I presume they will be fully qualified and just discuss one product set.

Just like the vertically integrated Bank advisers of the old days 😂😂

It’s like Yes Minister

Ken
2 months ago
Reply to  Confused

When my head stops spinning I will come back with a reply that makes sense
What an incredible mess Just when you thought it could not get any worse and maybe just maybe there was a glimpse of light in the future It gets snuffed out by people who generally have no idea what they are doing Why they are doing it and accompanied by no idea of the industry and how it works
It’s like “ ground hog” day
We are right back where we started

Davey NoFurries
2 months ago
Reply to  Ken

They know exactly what they are doing – they are being bought, or bullied, or held to ransom. But one thing’s for sure, that are not doing their job, and acting in the best interests of all of the stakeholders, including the consumer.

Anonymous
2 months ago

“Importantly, all advisers will be subject to the same standard under a modernised best interests duty. This will give consumers confidence in the advice they have receive from the expanded, regulated advice environment”
Will it though, when you have a code of ethics under Corps Act for one set of “relevant” advisers and not the so called ‘qualified” adviser? How on earth can you label a more qualified cohort ”relevant’ and the least educated “qualified”.

Andy Semple
2 months ago

I’ll stick with General advice

Curious onlooker
2 months ago
Reply to  Andy Semple

General advice is as big or greater issue than limited advice

Survivor
2 months ago

WTF

Researcher
2 months ago

So after all the tough talk about banks, Jones politely opens the door to let them back in. What a joke.

LNP & ALP both corrupt
2 months ago
Reply to  Researcher

Yep LNP owned by Banks & Life Co’s.
ALP owned by Industry Super.
Letting ALL Insto’s into the open slather product flog world ensures both ALP & LNP will pass the laws in both houses.
REGULATORY CAPTURE CORRUPTION complete !!!!

Has Shoes
2 months ago

so, from “hot mess” to “chaotic, %$&^ hot mess…”

I'm over this stupidity
2 months ago

Reading comments here is keeping me sane. I think the leaders today have either gone mad or really stupid. Mistake after Mistake. And the people respresenting advisers are not much better – why – because nothing is changing for the better no matter how much we tell them what is wrong. The government don’t get what advisers go through or what advice is. To say money will never be charged is BS. Who pays for the staff giving this advice? What cost centre does it go to and do you really think it will be free? No, it will come out of the fees paid by all members even if you didn’t ask for advice you will pay. Another thing they do is make it really hard for external advisers to get information from them. Also clients. Forms (their forms) have to be signed and uploaded. Last time I looked the client owns the money not the bank or the super fund. They are just administrators paying a return – hoping to increase their investors to continue their business. I hope all the super funds and all the bank staff have to pay the ASIC levy as well! They wont be in advice – proper advice if their cost centres are running at losses. Banks do not make losses Mr Jones. Why can the government have so much power in this industry? Can’t anyone tell them where to go as they are stupid idiots bluffing the public and have no idea about profit and loss statements clearly. They never have to pay for anything themselves and they get into politics for the power and glory and the huge salaries they do not deserve.

Davey NoFurries
2 months ago

my thoughts exactly – 100% on the money

Comrade Adviser
2 months ago

This is exactly what communism looks like however the government thinks that the superannuation is government money not the individuals money.

XTA
2 months ago

Geeze, if I were the Liberals I would be latching on to this announcement and its repercussions. Not sure how the public would take it once they know the details. When is the next election? Bye Bye Jonesy.

Was Jones thinking about himself with the (unqualified) “qualified adviser” stance? He’s in a finance portfolio, with no qualifications other than being a career union lawyer with zero life experience in the practicalities of running a business or providing advice, or understanding of finance. As you can see the results are poor.

Queue RC 2.0
2 months ago
Reply to  XTA

LNP are owned and run by the Banks, Life Co’s, Finance Institutions.
ALP are owned and run by the Industry Super Funds.
To get this accepted both ALP and LNP will need to vote yes as the Greens and Independents won’t, thus the banks added together with ISA.