‘They’re not getting the advice they need’: Labor regulatory system plans revealed

While discussing regulation during webinar hosted by the Financial Planning Association of Australia (FPA) this week, Stephen Jones laid out the party’s plans should it win this month’s federal election, noting three areas in the market.

“There’s the high-net wealth individuals who will find a price point in the market irrespective of what we do or don’t do,” Mr Jones said.

“There’s people down there in the lower end or who are in crisis who actually need financial counselling more than they need anything else. I think there’s absolutely a role for government for direct service provision in that area.

“But the vast majority of Australians are in the middle of those two groups and they’re currently not getting the advice they need. We want to design a market that meets their needs.”

Mr Jones conceded that there is no one solution to that design, noting factors such as robo-advice which may play a part albeit not integral.

“There’s a role there. Maybe somebody will come up with a business model that makes it work, but I think the majority of Australians want to… have a conversation with a qualified person who knows what they’re talking about and get some advice,” he said.

“I’m keen on us creating a regulatory system that focuses on that middle.”

During the same webinar, Mr Jones expanded on a recent pledge to overturn current education requirements for the advice industry, saying Labor believes “there is a need for us to put in place a transition arrangement”.

Mr Jones’ comments come after a recent appearance on the ifa Show podcast, where he gave a candid assessment of the financial services industry, labelling the poorly managed “tsunami of regulatory changes” as the main culprit for adviser exodus in Australia.

“There was a whole bunch of changes that were in play, there was a known timeline for it, not going back months or even years. Some of this stuff has been five, six years in the making, how a government could monumentally mishandle a bunch of this stuff is beyond belief, particularly a government that says it's a good economic manager."

Listen to the full podcast with Mr Jones here.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.