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Mixed outcomes likely for advisers from Albanese Govt

Mike Taylor23 May 2022
Left in limbo

Certainty around the workings of the experience pathway for financial advisers will be one of the first things on the agenda for the new Minister for Financial Services, Stephen Jones.

In his numerous interactions with financial planning groups over the six weeks of the Federal Election campaign, Jones made it clear that he was conscious of the experience pathway issue and the manner in which he, if he became minister, could deal with it.

Jones has the ability to exercise his ministerial discretion to have regulations made around the experience pathway and he made clear it was his intention to do so reasonably promptly after a Labor Government took office.

However, he also made clear that a new Labor Government would not be adopting an open-ended approach, with the pathway having a start and end point.

The good news for financial advisers is that it was Jones who prompted the Morrison Government’s consideration of the experience pathway when he said that ignoring advisers prior learning represented an immense waste.

The other good news is that implementation of the experience pathway does not require legislation or debate in the Parliament, although a hostile Senate could move to disallow the regulations.

Jones has also signaled that, where appropriate, the new Government will not necessarily be waiting for the outcome of Treasury’s Quality of Advice Review to implement changes it believes they are necessary.

However the jury remains out on whether the new Labor Government is entirely comfortable with retaining commission-based remuneration structure within the Life Insurance Framework notwithstanding the fact that Jones said over the final weeks of the election campaign that his view  had changed.

Jones, who last year said he was willing to listen to planner arguments around commissions in the context of the LIF, earlier this month signalled that he had softened his position further while maintaining that it was still up to the industry to argue its case.

“The burden lies upon the industry at large to prove that a commission-based sales model that’s attached to an advising sector is able to provide a service to consumers that is not conflicted,” he said.

The future of the LIF is tied up in the Quality of Advice Review but it will be up to the Government to decide what it decides to accept from the review’s final recommendations.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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