‘No substantive advice reform in the life of this Parliament’, says Bragg

In a statement on Wednesday, Senator Bragg accused the Minister for Financial Services, Stephen Jones, of making advice more expensive and putting it firmly out of reach of Australians.

“After 18 months of dribbling, Stephen Jones has finally released a draft bill on financial advice,” Senator Bragg said.

“That’s all it is, a draft bill on just half of the recommendations from the Levy review. After 18 months,” he continued.

Senator Bragg is addressing what appears to be a broken promise from Minister Jones. Until this week, Minister Jones had assured that the initial draft bill would strongly emphasise the reduction of red tape. However, the first tranche disregarded a significant burden on advisers: the statement of advice (SOA), which has, over the years, expanded into a document spanning tens of pages.

Additionally, the senator hinted at the possibility that Minister Jones might run out of time and be unable to successfully navigate the entirety of the Quality of Advice Review (QAR) through Parliament.

“Releasing a draft bill at this stage of the term means there will likely be no substantive financial advice reform passed in the life of this Parliament,” he said.

“If Labor was serious about cutting red tape from financial advice, they would prioritise implementing the recommendations of the Levy review, in full.”

Touching also on the ASIC levy, which has nearly doubled, Senator Bragg added that under Mr Jones’s watch, “financial advisers have been hit with the largest tax increase in living memory”.

“Financial advice has never been so unaffordable and it’s getting worse. Australians deserve better.”

Also in response to the draft bill, the Financial Services Council (FSC) chief executive officer, Blake Briggs, called the government’s first tranche “modest” and expressed the view that it represented a “missed opportunity” to initiate crucial reforms.

“It is a missed opportunity to have deferred implementing key recommendations on abolishing the ‘safe harbour steps’ and simplifying statements of advice, which would achieve the most in reducing the regulatory cost burden on financial advice,” Mr Briggs added.

The FSC’s stance is broadly in line with the reaction from other industry bodies and associations. On Tuesday, the Financial Advice Association Australia (FAAA) also noted its concern regarding the exclusion of changes to SOAs and safe harbour.

“We are concerned that the rationalisation of statements of advice and the removal of safe harbour steps from the best interests duty have not been included in the draft legislation at this time,” said FAAA CEO Sarah Abood.

“These are important elements in cutting unnecessary red tape and have the potential to meaningfully reduce the cost of providing advice.

“We will be seeking further clarification from the government on the timeframe for these measures.”