The open letter was written by the JAWG, which comprised 12 fundamental associations within the financial services industry, such as the Association of Financial Advisers (AFA), the Financial Planning Association of Australia (FPA) and the Financial Services Council (FSC).
In consideration of the Quality of Advice Review (QOA), the letter stated the JAWG’s intentions to “collaborate with the Government on implementing much needed change” to ensure that financial advice is accessible to many millions more Australians “for decades to come”.
The group expressed appreciation towards Jones, the minister for financial services, and his recognition of how financial advice had become inaccessible and unaffordable to the vast majority.
“We are grateful for your acknowledgement that financial advice is out of reach for most Australians, in part because of poor regulatory settings,” they said.
With the number of Australians receiving advice falling by half, adviser rates dropping to 15,800 and the average price of advice costing over $5,000, the JAWG urged the Government’s QOA response needed to be driven by the needs of everyday Australian consumers.
“Urgent action is needed,” the letter affirmed, whilst highlighting the Government’s “rare opportunity to deliver affordable and accessible advice to consumers”.
The associations identified that stakeholders continued to push the status quo without providing legitimate solutions for those who reach retirement without financial advice.
Instead, the letter provided five key recommendations to the minister for the Review to succeed:
- Ensure consumers can get scaled advice, that is the advice they want, how they want it, and when they want it, including via digital means;
- Support a professional financial advice sector, by increasing the number of financial advisers and financial advice providers, while maintaining a level playing field;
- Remove regulatory and disclosure requirements not benefiting consumers;
- Reduce the time and cost to prepare quality financial advice; and
- Establish a regulatory approach that facilitates the provision of financial advice without uncertainty or shifting goalposts.
“We believe that many of the final recommendations of the Quality of Advice Review are aimed at achieving these objectives. But Australian consumers will be left behind without the adoption of a holistic package of reforms,” they continued.
“The reforms must extend beyond easy wins such as streamlining fee disclosure requirements and iron-out obligations like the design and distribution obligations.”
The JAWG recommended the Government commit to timeframes when implementing the reforms as well as consultations with the industry.
seems a good list of wants
Jasmine, a very important article. Thank you. It is disappointing that JAWG did not mention that the United Kingdom’s Financial Wellbeing Strategy which is a ten-year plan has bipartisan support is based on free financial advice paid for by the government. The strategy was developed after extensive public and stakeholder input and involves the whole community. It was recently reviewed. With the forthcoming OECD’s Global Money Week on the 20-26 March the UK strategy is worthy of an article as it is highly likely it will be reviewed by the OECD. Clearly, many people are struggling with inflation and rising interest rates plus the strong possibility of negative equity in housing. It is a global issue. Jasmine, in my view, there would be a lot of Money Management’s readers interested in what is happening in the UK. Best. John Cosstick