‘Lacking in detail’: Howarth responds to DBFO announcement

On Tuesday night, Financial Services Minister Stephen Jones announced more detail on how the new class of advisers (NCA) would work in practice, though with draft legislation yet to be seen, many of the specifics remain up in the air.

While there has been criticism of what Minister Jones included in the announcement, such as concerns around the collective charging model that industry funds will deploy for NCAs, shadow financial services minister Luke Howarth said the lack of detail after lengthy delays is the real problem.

“After 720 days of waiting, we now have a third government response to the Levy Review but still no draft legislation,” Howarth told ifa in a statement.

“The Albanese government promised draft legislation before Christmas but has instead provided another placeholder announcement lacking in detail.

“Labor’s delays and inaction on financial advice reform is leaving Australians under-advised and under-insured.

“The government has left the Levy Review’s most important, red tape-reducing recommendations to the last minute and they are now at risk of not being legislated at all.”

The guillotine motion that ended the parliamentary year fanned the flames of speculation that an early election is on the cards. While recent days have seen these predictions scaled back, Howarth argued that his opposite number’s wish to have the Delivering Better Financial Outcomes (DBFO) reforms legislated in this term is in serious danger.

“The assistant treasurer will be making a Christmas wish that the prime minister doesn’t call an early election because there is a long list of financial services regulation this government has promised but will fail to deliver,” he said.

“This should have been legislated over a year ago, but Labor has moved at a snail's pace. Like most things he is responsible for, Albanese’s minister has left it to the last minute and is scrambling to make it look like this is progressing.”

Adding that getting these measures across the line should be the “starter’s gun for the reform of financial advice regulation”, rather than the “finishing post” the government seems to think they are, Howarth said the opposition is still looking to work with the government on “sensible proposals”.

“The Coalition is committed to getting the costs of financial advice down by supporting red tape-reducing reforms,” he said.

“We will examine the detail when it is available and work constructively to progress any sensible proposals, but it is important these reforms rebuild the advice industry and serve consumers, not just the industry super funds.”

The comments are in line with those made at an AIOFP dinner in Canberra last week, in which Howarth accused the government of delivering a “sweetheart deal” for “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 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.