Industry groups are hoping the new Labor Government will deliver quickly on its election commitments regarding financial advice, particularly around education standards.
A statement from the FPA says it’s expecting the new Government to quickly deliver on its election commitment to provide “much-needed certainty” to the profession on education standards, including providing for a framework to better recognise relevant experience.
FPA chief executive Sarah Abood says that with the profession left in limbo over the election campaign period as it waited for certainty on education standards “…the FPA expected actions on this issue to be the first order of business for the incoming Minister for Financial Services.”
In welcoming the incoming government, AFA CEO, Phil Anderson, expressed his preference that the ALP would be able to form a majority government as final results continue to be counted. He says the association looks forward to working with the new Financial Services Minister, Stephen Jones, to address adviser education standards and is confident this critical issue will be resolved.
Anderson says the association will also be looking to engage with the ALP in the lead-up to the release of Treasury’s Quality of Advice Review later this year and in the implementation of any recommendations stemming from the review.
Meanwhile, Neil Macdonald from The Advisers Association says that Labor has said it will be looking at financial services and it wants the industry to continue without too much further change.
“We’ve had enough change over the past decade, so that is … a positive.”
Macdonald says that in the lead up to the election, Stephen Jones promised that Labor would move to exempt advisers with 10 years’ or more experience and an unblemished record from having to obtain a relevant degree by 2026.
“We think older advisers who have passed the … exam and kept up with their ongoing education, who have demonstrated that they are competent and experienced, and who are valued by their clients, should be allowed to continue doing what they are doing, without having to get a new degree, so we hope Labor keeps this election promise.”
Macdonald notes that Jones also said Labor would move to recognise prior learning.
…he went so far as to say that it would be an immense waste of resources to ignore prior learning…
“In fact, he went so far as to say that it would be an immense waste of resources to ignore prior learning.”
Macdonald adds that after consulting with the industry, Jones also shifted his stance from believing life insurance advice commissions should be pulled back to zero, to acknowledging that the issue is more complex, “…suggesting a way forward that would not be about banning life insurance commissions as a form of adviser remuneration.”
Advisers Need Certainty
He adds that the association hopes that decisions around these pre-election promises will be made quickly “…because advisers need certainty in order to make decisions about the direction of their professional lives; whether they can stay on or whether they will have to exit,” he says.
“Quick answers will help preserve the number of advisers remaining in the profession and if they are the right answers, should also attract new people to it,” he states.
Meanwhile, FSC CEO, Blake Briggs, says the council looks forward to working with Labor’s economic policy team on their election commitments and encourages Labor to “…focus on initiatives that will deliver an efficient and competitive industry.”
“Labor will be responsible for delivering on important initiatives, such as the Quality of Advice Review and measures to make financial advice affordable and accessible for all Australians,” Briggs says.
The FPA’s Abood also notes that the association has already had good engagement with Stephen Jones on education and other issues in the past. It has prioritised a number of issues for the 47th Australian Parliament to address, including:
- ASIC’s industry funding model and education standards
- The creation of a Compensation Scheme of Last Resort
- Better regulation of ‘finfluencers’
- Tax deductions for the provision of financial advice
There will always be a never ending list of things that need to be done to improve the Industry.
There will always NEVER be enough time or resources to achieve everything.
Priority over “must have’s to survive,” MUST come first.
Making it attractive for the Industry to recruit to replace the eleven thousand Advisers who were forced out of the Industry due to the maze of complexity, MUST come second.
Part of that solution is to provide those Advisers who were pushed aside, though have considerable experience, to be able to re-enter as Advisers who can specialise in risk advice, without the ridiculous restrictions that currently push people away from risk advice, though who are perfect to help rebuild the Life Insurance sector.
Labor came up with a solution that is heading in the right direction to save the remnants of Advisers who have clung on.
What we need now is some true leadership and what I mean by that, is leaders who have the ability to listen and discern what will work and what will not, then act to bring the Life Insurance Industry up to it’s full potential, which will require 25,000 specialist risk Advisers.
Considering the estimates today that there are only approximately 1,200 risk Advisers left, we have a long way to go.
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