‘Need more doors’: Jones spruiks new class of adviser pathway

Speaking at an AIOFP dinner in Canberra on Tuesday night, Financial Services Minister Stephen Jones said the new class of adviser set to be introduced in tranche two of the Delivering Better Financial Outcomes (DBFO) reforms would be a way to progress greater numbers into becoming professional advisers.

“We need more doors for people to walk through, and we'll be restructuring the laws to ensure that we can have a new class of financial adviser,” Jones said.

“And we'll do this in a way which ensures that there is another career pathway into the profession.”

The current system for bringing in financial advisers, he said, is a “perfect set of arrangements on the assumption that people wake up at the age of 18, 19, 20 and say, ‘I want to be a financial adviser’”, yet that is not the way it works in reality.

“We've got to ensure that we have the right pathways, without compromising on the profession or the professional qualifications, but the right pathways to ensure that we're bringing more people into the industry,” the minister said.

Put simply, Jones said, “we need more advisers” to service the 5 million Australians at or approaching retirement – which he added is not even taking into account people needing to access advice at other life stages.

“That's the scale that we are confronting,” he said.

“So we've got to find a new way, more pathways to bring people into the industry without compromising on the important knowledge or the basis of the profession that is necessary so we can ensure that somebody is giving competent, professional advice to their clients.

“We'll also ensure that the new class of adviser becomes a pathway to a full degree, because I think that’s what the industry needs.”

‘Big challenges’

Speaking about the second tranche more broadly, Minister Jones assured it is coming “very, very soon”.

“There are some big challenges, and I'm taking them on because I think it's the right thing to do. We need to ensure that we get political consensus and public consensus,” he said.

Chief among the reforms are statements of advice (SOAs), which Jones said should be something “mum and dad can read around the kitchen table, not something that is used as a defence for a product issuer or a licensee in a courtroom”.

He added that the updated form of an SOA will be a practical statement of the information clients need to make a decision.

The second tranche will also see a “modernised” best interests duty, which Jones said would “specifically provide for scaled advice”.

“If you are providing simple advice on pretty straightforward product, then you do not need to provide 60-, 90-, 100-page document, or to have 3, 4, 5 consultations with your client,” he said.

The minister added: “When we land all these things, it will set the industry up for a long time.

“It's in the public interest to ensure we set Australians up with access to the information and advice that they are going to need to make the sort of decisions they are going to have to make with the real money that they are increasingly retiring upon.”