The evolving position being adopted by the Federal Opposition around the future of risk commissions – as outlined by Shadow financial services minister, Stephen Jones at the 2021 AFA Evolve Conference – was far and away the most-read story by advisers this week. No, this is not the Government speaking – but as opinion polls in recent months indicate a significant swing to Labor in the lead-up to the next Federal Election, the views of the Opposition become even more critical over time…

Shadow financial services minister, Stephen Jones, has signalled a softening in the Opposition’s position on the future of life insurance commissions.

Speaking on the opening day of the 2021 AFA Evolve Hybrid Conference, the shadow minister told AFA GM Policy & Professionalism, Phil Anderson, that his meetings with industry representatives and specialist risk advisers over the last 18 months has served to influence his thinking around risk commissions.

Shadow Minister – Financial Services and Superannuation, Stephen Jones, linking in to this week’s AFA Evolve Hybrid Conference …some good conversations with risk advisers over the last 12 -18 months

Responding to a question about the timing of the release of Labor’s financial advice policy platform in the lead-up to the next Federal Election, Jones said the Opposition wasn’t going to pre-empt the outcome of the impending review of the quality of life insurance advice (now contained within the Treasury’s review of the overall quality of financial advice). At the same time, however, the shadow minister noted that following a number of “…good, good discussions with risk advisers over the last 12 to 18 months”, those conversations had challenged some of his initial views in this area.

Directly following this observation, Jones reflected also on the need to balance the need for consumer protection with the need to retain a financially-viable financial advice industry.

…the message from the shadow minister …was clearly more nuanced than his message at the same event a year ago

While he made no commitments, noting there were more discussions still to be conducted, the message from the shadow minister on the future of conflicted remuneration was clearly more nuanced than his message at the same event a year ago, at which he said the provision of advice must be de-coupled from the sales process, which means the prohibition of commissions. While he said at the 2020 AFA Vision Conference that he was open to dialogue on the question of risk commissions, he added that he was starting with a bias against it (see: ALP Inclined to Ban Risk Commissions).

Almost 12 months on, both the tone and body language displayed by the shadow minister appeared more conciliatory, which appears to be consistent with a gradual evolution in the language used by Jones when reflecting on the future of risk commissions.

From his position at the 2020 AFA Vision Conference of being inclined to ban risk commissions, this narrative evolved by April 2021 at this year’s FSC Life Insurance Conference to challenging the industry to convince the Opposition of the merits of retaining risk commissions. He told the FSC conference delegates that while the Banking Royal Commission quite clearly set a prima facie position on conflicted remuneration, the Opposition had found some areas where the prima facie position is not necessarily the most practical and best position (see: Convince Us On Commissions – Labor).



4 COMMENTS

  1. Settle down boys and girls, I have seen this movie before. Opposition spokesman makes NON-SPECIFIC soothing noises about a policy position guaranteed to upset his audience if left unchanged.

    Anyone remember Joe Hockey and his promises back in his early days as Minister for Financial Services in 2002. Joe was our man after attending a lot of our free lunches, but when his mob won again in 2004 he had been moved to Human Services . He moved on, we got whacked with the government’s mutated interpretation of the Wallis recommendations. Advisers as usual were the forgotten people!

    Mr Jones has to serve his financial masters, the industry funds. For whatever illogical reasoning, they’ve always seen advisers as a threat and something to be attacked, whether we worked for a big insurer or fund manager I was self-employed advisers. The ISN failed to distinguish between self-employed advisers of independent mind. (I can still call myself independently minded can’t I, ASIC) and the wolves formerly employed by the big banks

    “Telling them what they want to hear” is 101 politics. All bets are off after you leave the room and shut the door. There’s enough wriggle room in Mr Jones’s “nuance” to house a giant Gippsland earthworm!. We we could spend a lot of time listening to Mr Jones, even allow him to “duchess” us, only to find his first ministerial plum job was in industrial relations or some other meaningless sinecure.

  2. The problem with todays world of negotiation, is that plain speaking is seen as as confrontational and must be avoided.

    Politicians and Lobby groups are trained to deflect and redirect the conversation to safer ground, while behind the scenes they continue to push their own agendas.

    Jane Hume hit it on the head when she said there are so many Regulators and Regulations, even she cannot keep up with it all.

    Stephen Jones will do what all Politicians do, which is to put himself in a position to be seen as a person who can make positive change, while always having prior Royal Commission and Regulator investigations, recommendations and upcoming reports as the fall back position if he gets stuck.

    There is only one way to cut through the fog and that is to put a blow torch to everything they say and recommend.

    There are three words that always cuts through the maze and enables me to understand an argument and defeat any conflicted opinions from vested interest groups.

    These words are; What, Why and How.

    What is the issue? Why is this an issue? How did you come to your conclusion? What verifiable proof do you have? Upon proper recognition of a problem, What is your recommendation? How did you come to that conclusion? What verifiable proof do you have that your recommendation will work?

    These three simple words can cut through so much hot air and vested interest agendas.

    Though more importantly, it holds those groups accountable.

    Accountability for their own actions is the worst possible word for Politicians and the Public
    service sector, hence the reason for the Legal profession to step in and come to the rescue with further Legal interpretation and for good measure, more regulation to further interpret the old Regulation.

  3. Beware of wolves in sheeps clothing! You can kiss my *** all the way to the election and then my union mates will take over and you can all work for them!

  4. Like ALL previous comments before me…I trust NOT one word this bloke says. NOT ONE!

    He could not provide one decent argument that benefits consumers for removing insurance commission as the most viable remuneration method – yet I’ll bet he’s still thinking of removing them.

    He’s a left-wing socialist. If the current activities in Melbourne and around the world don’t tell you what to expect when they hold office, then voting for his lot (or the LNP at the moment) would truly be deliberate business suicide.

    I’ll pass on ANYTHING you say Steven Jones, thanks.

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