Jones ‘solely focused’ on consumers

In a recorded message to the Association of Independently Owned Financial Professionals (AIOFP) Conference in Bangkok, the minister addressed the decision-making process of the Albanese government in relation to financial services.

“From the government’s perspective, this is an important time for the industry. There are lots of challenges, but also some great opportunities to bring about some positive change,” Mr Jones said.

“And if I look at the advice industry today, I think many people would agree that the industry isn’t working well for advisers. And it isn’t working well for consumers. We don’t have enough advisers, and we don’t have enough sources of information and the information that consumers often receive is hard for them to understand.

“That makes me take a step back and say, what are we trying to achieve here?”

He added that the answer to that question is that the government is “solely focused on the outcomes for consumers”.

“I’m not doing this for advisers, or institutions or manufacturers, as important as all of those groups are. The Albanese government is solely focused on the needs of consumers. And that’s the prism through which we’re seeing everything,” Mr Jones said.

“And in financial advice, the greatest area of need for consumers is around their retirement incomes. That’s not to say that consumers don’t have other needs for advice. Of course, they do. But we have over 5 million Australians either at or approaching retirement.

“Thanks to the success of superannuation, the average Australian is now retiring with over $200,000 in their super, that’s a significant sum of money. And consumers need help, little advice, and information to make sure it goes as far as possible to give them a dignified retirement to help.

“It’s critical that we have advisers and getting more advisers into the industry.”

In June, the Financial Services Minister introduced legislation to the Parliament to enact the experience pathway. He told the AIOFP members in Bangkok that he is “confident that it will pass through Parliament soon”.

“This is a pragmatic solution, which will keep good advisers in the industry. I’m also determined to improve the entry points for new advisers,” Mr Jones said.

“While I’m committed to the professionalisation of the advice industry, the current pathway, a legacy of FASEA, is not up to standard. I want to ensure the education standards make financial advice and a career, a career of choice and lead to high-quality advisers coming into the profession.”

AIOFP executive director Peter Johnston said: “We are also pleased that the minister expects the Education Pathway ‘10-year rule’ will pass through both houses at the next sitting of Parliament.

“When we first presented a case for this proposed direction to the minister in 2020, we pointed out that the advice community will be losing thousands of highly experienced advisers and that will ultimately impact heavily on consumers who need advice.”

Mr Jones also said there are areas of red tape where the government is “hindering, not helping access to advice”, pointing specifically to the process of providing financial advice.

“Why are statements of advice so unwieldy? Why do advisers need to ask clients over and over and over and over again, for things that could be done once? These all add to the cost of providing advice, without any improvement to consumer protection or consumer outcomes,” he said.

“To me, these are the easy and obvious things that we can do.”

Also looking at the availability of advice, Mr Jones said that even doubling the number of advisers would not close the advice gap in the economy.

“Many consumers have simple advice needs, which could be provided by institutions with appropriate guardrails. For more complex needs,” he said.

“We must have quality advisers, lots of them, who can provide fit-for-purpose advice to their clients. This will be good for Australians, good for advisers, and good for the country as a whole.”