‘Not on my watch’: Minister quashes backpacker concerns

Speaking exclusively on the ifa podcast, Mr Jones was emphatic that super funds will not be dragging backpackers off the street to provide advice.

“Let’s be very blunt up front, not on my watch,” the minister stressed.

Mr Jones told ifa that before the second tranche of the government’s response to the Quality of Advice Review is implemented, it is important to nail down exactly what qualifications will be required.

“Three things that need to be resolved for that second tranche of work, and that is what’s the scope of advice? What’s the competence or qualifications required to deliver it and then how is it being paid for? None of those things were resolved, by the way, in the Levy review,” he said.

“But they’re things that I have to resolve and I will resolve and they’re all related.”

The minister added that clearly defining the scope of advice super funds will provide, including what “can and should be done” inside the fund, and what “necessarily must be handed off to a professional financial adviser”, will also need to be worked out.

“Getting those boundaries sorted is important,” Mr Jones said.

“I think we’re getting closer, and the consultations have been great.”

The next step, he said, is to work out how superannuation funds can help funnel more people into the profession.

“I think it’s actually a great opportunity to create a logical pathway into professional financial planning,” Mr Jones said.

“Somebody who might start in a fund, develop some skills, some knowledge, and a passion to develop more and take that learning on and perhaps add to it with some tertiary qualifications and go on to put their own shingle up and I think that would be a good thing.

“So, we’ve got to get that bit right. That’s the competence and qualifications for somebody who’s doing it in-house.”

The minister added that there are also still questions around the way fees for advice will work within super.

“Charging arrangements and what can be collectively charged across the fund in the way that intra-fund advice is provided now, but what must be paid for by an individual if it’s more bespoke information and advice that is being provided to an individual.

“[We’ve] got to get all those boundaries right and I’m pretty confident that we can do it and I want to get it out the door early next year, because that number again, 5 million Australians who need the information and advice.

“And as you said up front, 16,000 advisers, those numbers don’t square up, so we have to make room for a new group.”

He added that the industry can expect draft legislation on the second tranche of reforms early in 2024.

“I’ve got to try and nail the policy, that is what government says or thinks it wants to do, and then you design the legislation around the policy parameters. We haven’t done the first of those things yet, so they can’t do the second,” Mr Jones said.

“Look, I’m hoping early next year, to be frank. So, if I make a decision and if government makes a decision on the things that we want to do by the end of this year, we can then get cracking on the legislation for early next year, having it out for industry consultation and then in Parliament after that.”

To watch our full interview with Minister Jones, click here.