The Coalition will take all 22 Quality of Advice Review recommendations to the next election and says giving a “carve-out” to allow super funds to give more advice, but not other institutions such as banks or insurers, will create an unlevel playing field.
Speaking at a Conexus Financial Political Series lunch, in partnership with BT, in Melbourne on Monday, Shadow Treasurer Angus Taylor said QAR lead Michelle Levy delivered a “blueprint” to the industry and called on the government to provide a full timeline for implementation of the recommendations.
Minister for Financial Services Stephen Jones announced in June he would accept 14 of the 22 proposals, with advice red-tape reduction being the highest priority, along with expanded boundaries for the provision of advice from super funds. Prime Minister Anthony Albanese last week said the government would introduce QAR-related legislation next year.
“We’ll support bringing forward elements to support and reduce red tape in the short term, but we want to see that full agenda brought to the table and a focus on this government getting on with the full job that Michelle Levy laid out in her review,” Taylor said
“No carve-outs, no entrenched regulatory advantage.” He confirmed the line was a reference to the seemingly preferential treatment super funds had been given over other institutions to give advice. Jones has repeatedly said he believed APRA-regulated funds giving retirement advice was a higher priority than other so-called non-relevant providers. He has said the advent of the best financial interests duty meant they had an obligation that would override any conflicts of interest.
Asked whether the Coalition would take all 22 recommendations of the QAR to the next election, assuming the government stuck to its initial 14, Taylor said the Coalition would do whatever it took to achieve the goal of more access to advice.
“We’re committed to the full 22 and an appropriate timeline for that,” Taylor said.
Jane Hume, the former Minister for Financial Services and now Minister for Finance added that Levy did an “exceptional” job in her review.
“She came up with a suite of recommendations that work together,” Hume said. “If you cherry pick, unfortunately, they won’t work together to deliver what it is that we want.”
Taylor said there is a serious risk of a large cohort of Australians being under-advised ,which has the potential to seed “the next crisis”.
“Let’s anticipate it, let’s get ahead of the game,” Taylor said. “To avoid being under-advised let’s create a testable, customer-focused, professional sector that can work through multiple channels. But the personal advice channel will always be the leading channel.”
Slow timeframe to reform
Jones has faced criticism from the industry for taking a slower approach to reform than anticipated before the election, when he said there would be issues to fix “on day one”, and has since said the previous government “rushed” its reforms.
Hume said the Coalition is disappointed to see the “go-slow approach”, particularly for the later streams of the QAR, including allowing other institutions to get into advice.
Additionally, Hume said she was not satisfied with the government’s dismissiveness of Levy’s “good advice” recommendation.
“‘Good advice’ will be advice that is fit for a customer’s purpose – you know what good advice is because you give it every single day,” Hume said.
“The [government] should be able to walk and chew gum at the same time. It is expected of them. The delay on a lot of the other recommendations creates uncertainty for the industry that is crying out for stability of policy settings after a considerable period of flux.”