Momentum Media recorded a special interview with Financial Services Minister and Assistant Treasurer Stephen Jones for an insightful episode of The ifa Show.
Managing editor for advice and distribution, Maja Garaca Djurdjevic with Financial Services Minister and Assistant Treasurer, Stephen Jones, MP.
Hosted by Momentum’s managing editor for advice and distribution, Maja Garaca Djurdjevic, Minister Jones shared his candid assessment of the progress in the financial advice industry, discussed his goals, addressed criticism surrounding his approach to the Quality of Advice Review (QAR), and delved into the role of superannuation funds, banks, and insurers in shaping the future of advice.
Mr Jones sent a candid message to advisers, assuring them that he “gets it” and believes in the work they do.
“You’ve got a minister who gets it, who’s keen on working with the profession,” the minister said.
“I feel for the advisers. It’s not just five- or six-years’ worth of change. If you have a look at what has gone on over the last two decades, there’s been significant upheaval in the financial advice industry, and in the finance industry more broadly, driven by crisis, driven by inquiries, driven by royal commission, all of it well meaning, but you’ve had layer upon layer upon layer of regulatory change often solving the same problem three or four different times, and three or four different ways,” Mr Jones noted.
“So, what I wanted to do is take a step back and say what matters most here? Fix it once, not five times and ensure that the regulation is fit for purpose, is making it safer for consumers, but also providing not one more page of red tape and bureaucratic regulation for the industry than is absolutely necessary. And that’s the journey we’ve embarked upon.”
Moreover, the minister assessed that the QAR review is “an important job of work”.
While he highlighted some of its “useful recommendations”, he stressed that some were fairly contentious and require further analysis.
“We’ve stress tested a bunch of them and so we’ve taken the first tranche which is stream one, and they are the ones that are obvious, things that are about red tape reduction. I hope to have some draft legislation within the month so that we can pour over that, just to make sure it’s technically correct, and get it into Parliament first up next year.”
The second tranche, which centres on retirement income, is the “next cab off the rank”.
“We’re doing all of these things in parallel, but it’s as simple as this. You got a tube... and if you try to squeeze everything through it at once, nothing will pass through. So that’s the tube of Parliament and the policy making process. So I’ve been very pragmatic.
“What can we get through? What’s ready to go? What’s not ready to go? And let’s try and move these things through in a logical fashion”.
Touching on the advice needs of younger Australians, Mr Jones said mortgage brokers and other members of the financial services universe can help guide Australians with their financial queries. He also emphasised the existence of a demographic group in Australia — those in their mid-40s to late 50s — who currently lack access to advice and are unlikely to seek assistance from their superannuation funds.
“I think we’ve got to do something with that group as well. And they probably only need once-off advice. They don’t need to be having an ongoing contract with a financial adviser. So, I’ve got to find a way of dealing with that issue as well,” the minister said.
Furthermore, he subtly expressed his disapproval of banks expanding their advisory capabilities, emphasising his lack of concern for their commercial interests.
To listen to the episode you can click the player below or click here.