Key insights on tranche 2: Howarth calls reforms a ‘sweetheart deal’ for funds

Speaking at a dinner organised by the AIOFP for its members in Canberra, and attended by ifa, on Tuesday night, the shadow financial services minister accused the government of being “captive” to “union-run super funds”.

“Its approach to advice reform has prioritised that part of the market,” Howarth told attendees.

“Independent advisers are not a priority for the Albanese Labor government. And this is, I think, an anti-business government.”

Howarth highlighted the 700-day delay in implementing key recommendations from Michelle Levy’s Quality of Advice Review, arguing the government has reduced reform to a "last-minute" effort.

“Now regarding the Quality of Advice Review, this was supposed to be the starters gun for advice reform, not the finishing post in the last week of 2024 with the risk of Parliament not even coming back next year.

“They’ve also taken a pick and choose approach to it, putting together a sweetheart deal for the industry super fund owners”.

Howarth said that while there are “a few good things” in the government’s upcoming draft legislation, “it barely scratches the surface”.

“Much of its focus is on the super funds and bigger licensees. That's fine, but it isn't the whole story, and there was almost no chance of getting this legislated before an election is called,” the shadow minister said.

Howarth added, however, that the Coalition will engage in “good faith” with the government’s draft legislation.

“These delays are on the Albanese government,” he said.

Howarth also briefly praised Minister for Financial Services Stephen Jones, noting that while he “has good intentions”, he doesn’t enjoy the support of his government. “Jones is swimming against the tide and doesn't have the support from superiors in cabinet,” he said.

Howarth also slammed Labor for the cloak of secrecy surrounding the second tranche of advice reforms, confirming that Treasury meetings required participants to sign non-disclosure agreements.

Accusing the government of sidelining transparency in favour of backroom deals, the shadow minister said: “Most stakeholders have been totally excluded from these processes, including independent financial advisers”.

“You will be given a take it or leave it legislation that has been cooked up in the dark.”

Also addressing attendees at the dinner, Minister Jones refrained from providing a clear timeline for the release of the government's second round of reforms, though he assured it is coming “very, very soon”.

“There’s a lot of work to be done,” Jones said, adding that the government “will be implementing the majority of those recommendations, but not all of them”.

Offering limited details, Jones reassured attendees that the new class of adviser would not undermine the profession but will instead create an additional “career pathway” into it.