Everyone happy except advisers
Financial advisers may be sceptical of the Government’s financial advice policy changes but insurers, banks and superannuation funds have responded positively.
Industry superannuation funds, the Financial Services Council (FSC) and the Council of Australian Life Insurers (CALI) all responded positively to the announcement by Assistant Treasurer and Minister for Financial Services, Stephen Jones.
Not only CALI but the Insurance Council of Australia representing general insurers welcomed the changes, while the FSC chief executive, Blake Briggs said his organisation welcomed what represented a comprehensive framework to deliver on its commitment to make financial advice more accessible and affordable.
For its part, Insignia Financial also welcomed the Government’s move with its chief executive, Renato Mota saying a broad advice continuum that considers the needs of many and reaches more people has been long-needed.
“The reduction of red tape and the introduction of a new class of qualified advisers alongside professional financial advisers across all financial institutions, including superannuation funds, are the right steps forward to deliver simple advice at scale and increase accessibility,” his statement said.
Alongside CALI, Australia’s two largest life insurers, TAL and AIA Australia, were also positive on the changes with AIA chief executive an CALI co-chair, Damien Mu congratulating Jones for his “bold and transformation announcements”.
“…supporting Australians with advice is critical to their financial wellbeing now and in retirement. The life insurer receives customer enquiries that the current regulatory framework prevents the company from assisting with, to the detriment of consumers,” he said.
“Insurers have a clear role to play in helping people understand if their cover continues to meet their needs as their lives change, to right-size where needed and to assist with affordability. Our ability to help people understand their protection needs and ensure their insurance is fit-for-purpose will be significantly improved under the Government reforms, meeting an under-served need in the current environment,” Mu said.
The newly-formed industry funds group, Super Members Council, also welcomed the Government’s announcement with its executive general manager, Policy, Mel Birks stating superannuation funds are trusted sources of information on super and retirement for their members and should be provided with the right legislative and regulatory tools to meet members’ needs.
“The proposed expansion of the scope of advice funds can provide will allow thousands more Australians approaching retirement to get the simple advice they need to make the best of their financial position.”
“Allowing funds to provide advice that considers some of their members’ key broader financial circumstances, such as debt and assets as well their partner’s income, will lead to better tailored advice,” Birks said.
All of this compares to the reaction of FAAA where its chief executive, Sarah Abood expressed concern that the Government’s approach “appears to invalidate the hard work and pain that has been involved in creating financial advice as a profession and winning the trust of consumers”,
“Specifically, the Minister has announced that any financial institution will be able to provide personal financial advice to consumers, using people who are not financial advisers – yet who would be called “qualified advisers”. There is no detail on the qualifications that would be required, however they would be substantially less than what is currently required to provide financial advice. Thus, the proposed term is self-contradictory and extremely likely to confuse consumers,” Abood said.