Current advice model ‘busted’, says Labor MP
Stephen Jones says financial advice needs a new model that is tailored to the different professions within the sector and the different types of advice required by consumers.
Speaking in a recent podcast, shadow minister for financial services and superannuation Stephen Jones said that with Australians retiring with more money than ever as a result of super, it is vital they are able to access the right advice at the right time.
However, the raft of advice reforms in recent years has made this harder, Mr Jones told Momentum Media’s editor of mortgages Annie Kane.
Mr Jones stated that the current advice model is broken and that a new approach is needed that recognises the diversity of professionals in the advice sector.
“The existing market is busted. It’s not going back to the way it was 10 years ago or 20 years ago, so we need a new business model, and it’s not one, it’s lots of business models which provide reliable professional advice and information to people.
“The profession is not homogenous. You’ve got brokers, you’ve got advisors, you’ve got risk advisors, you’ve got wealth advisors. There is a core level of qualification that is needed that is common to all of them, but there are also specialisations within a profession that need to be accounted for in the accreditation and licensing system and we want to fix that,” he said.
Mr Jones said it was also important that any advice model recognises that not everyone is going to require the same sort of advice and that they’re not going to need the same sort of advice at every point in their life.
While government sets the regulations and has a role in some parts of the market, Mr Jones said it is up to financial advisers and the advice sector to come up with business models that will provide consumers with what they want in a safe environment.
“We are absolutely focused on getting that right if we win the May election. Advice is an unfinished piece of the puzzle that we need to get right,” he said.
Mr Jones also noted that there had been suggestions that the big solution to the issue of accessibility to affordable advice is to let all the APRA-regulated super funds provide advice by changing the intra-fund rules.
“[The idea] that funds can just get into the advice business – I’m incredibly unattracted to that idea,” he stressed.
“If we did that, it’d be like just setting the clock for the next Hayne Royal Commission with that sort of supercharged vertical integration model. So, we need different approaches in this area.”
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
