‘Worst is over’ regarding regulatory change: Hume

Senator Jane Hume has confirmed that financial advice is being viewed as a profession rather than a sales role and that the industry has adjusted to recent changes.

In an interview with Stockspot chief executive and founder, Chris Brycki, Hume, who was minister for financial services, superannuation and the digital economy, said it had been an “uncomfortable shift” for many in the industry since the Royal Commission.

“In the last 20 years, we have seen a massive shift from being a sales job to being a proper profession where the interest of the client comes before the interest of the adviser. That’s been an uncomfortable shift for a lot of people.

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“So we knew there would be some people who didn’t want to come on that journey but I think the worst is over and the industry is settled.”

Earlier this month, Financial Services Council chief executive, Blake Briggs, said he felt the advice industry should be viewed as a profession and treated with a lighter touch regulatory regime.

She highlighted the changes had led to other benefits such as higher returns and lower product costs but this had been countered by the higher advice costs.

“This means financial advisers have to demonstrate the value they offer to their clients and sometimes that can be an uncomfortable call but it’s an important conversation because we know that advised clients tend to make better decisions especially in periods of volatility.”

Hume also said digital advice could play a role in closing the advice gap and work alongside traditional face-to-face advice for people with fewer financial needs.

“Not everybody needs a full financial plan on day one, sometimes they just need bite-sized pieces of advice and certainly digital advice can fill that void.

“Digital solutions can reduce the compliance burden for traditional advisers, that reduces the cost of a financial plan.

“It’s about making sure more people have access to advice, it’s not about eating into traditional advisers’ client base, it’s about making sure clients of traditional advice have access to cheaper advice.”

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Cheaper advice, digital solutions, increased returns, lower costs, uncomfortable shift. You still do not understand what we do, do you Hume?

'The worst is over'? Well it will be on 21 May. This was the worst Coalition government in living memory. They turned their biggest ally into their number one enemy. How dumb. We influence 2 million Australians and advise them on their life savings. In the 12 months leading up to the election, we have been jacking up client fees, handing over totally insane, nonsense red-tape and cutting off hundreds of thousands of people from their trusted source of advice altogether. How do you reckon those conversations went Ms Hume?

Good point on biggest allies. Not anymore.

Very well said -
"The worst is over'? Well it will be on 21 May. This was the worst Coalition government in living memory. "
I voted this morning; it was very satisfying.

Absolutely. LNP born and bred. I now consider myself an activist against the LNP.

“uncomfortable shift” , said as only a politician can.
Try these words Jane... devastating, bankrupt, out of business, shedding clients, turning clients away because they can't afford it, anxiety, depression, mental health issues, sector in tatters, life changing, retirement wrecked.
You might find these words "uncomfortable" Jane
By the way the mortgage brokers still have commission and you have cancelled their review.
Maybe the FPA needs to look at how the Mortgage Brokers Association handles Canberra and get some heavy weights on board instead of crying that they do things differently.
They still have businesses, many of us don't.

Mortgage Broker commissions are still going to go. Treasury and LNP forced the banning of commissions onto them post RC as it is defined as conflicted remuneration under legislation. It is only regulation that carves an exemption out. Legislation needs to be repealed by Parliament. Regulation can be removed at the stroke of a pen by a sitting MP. An old trick but an effective one.

Which legislation? Mortgage broking isn't covered by Corps Act, and hence not by "conflicted remuneration" definition. Lending and associated activities is covered by completely separate legislation, colloquially known as the Credit Act.

BTW fee for service advice is potentially covered by the Corps Act "conflicted remuneration" definition, but it it is specifically carved out elsewhere in the Act. It's not carved out by the FASEA Code though, so potentially breaches Standard 3.

A credit facility is a financial product under the ASIC Act. Conflicted remuneration is banned for such products under the Corp Act. Mortgage broking conflicted remuneration is exempted under regulation. Change the regulation and commissions are banned. Happy to be corrected if I am wrong.

Good article. Only thing missing is what Labor are likely to throw our way if they win?

Well Jane, you have yet to prove your value to our profession. Not even a politician has to be voted on every 12 months yet here we are, deemed to be a profession by you and treated like compete idiots. Cant wait to see the back of you and your mate Josh.

What a patronising answer from Hume. If politicians showed one percent of the professionalism that financial planners do maybe we wouldn't have the unnecessary regulation that makes advice out of the reach of most Australians. Also stop with technology is the fix, it isn't, getting rid of the ridiculous level of regulation is the answer. The Libs really don't want advisers voting for them, it is going to be fun to see Hume and Frydenberg lose their seats and blame everyone except themselves.

We are voting you out anyway.

I would not believe or trust a word Ms Hume, Minister for Robo Advice and the Banks ever says.
Ms hume is the puppet of Frydenberg, just like O'Dwyer was too.
Frydenberg's kill Adviser rule over the last 8 years to make way for Banks Robo advice dreams is nothing but a total disaster.
Frydenberg's political career needs to be killed like he has tried to kill and killed many Real Advisers.
Out with Frydenberg.
Out with Hume.

Fortunately Frydenberg will be out.
Unfortunately Hume is part of the "unrepresentative swill" which Keating spoke about.

Bad choice of words. Why admit the regulatory changes have been bad???? Leads me to query "why?"

Shouldn't it say "The current state of regulation has never been so bad"?

At no point in time has it been as bad as it is now/today. What is she smoking? Nothing has changed and on her watch things have got worse.

Will the bank job start day one after the election?

Now the diatribe from Ms Hume alters course. Forget advice, go digital. I wonder who's interest this serves the most? Wouldn't be the big banks and the insto's as the only entities than can fund the high cost of digital platform development would it?

And the very same group that stuffed advice for advisers and Australians in the first place.

Ms Hume your lack of transparency and scheming is there for all to bear witness to. Time for you to be made redundant. Oh there's an election coming, I wonder how you'll fare? I would wish you luck but I don't mean it so I won't say it.

Robo-politician. Insert bank funds and of it goes.

Absolute disgrace.
There is nothing this current Liberal Govt has done to benefit financial advice or advisers in their entire term in power.
Hume is an enemy…..get it straight, get it clear, get it now.
She is hopelessly inept.
Time to go right now.

Bye Josh. That look of shock on your face was up there with Turnbull’s.
LNP is dead. Sad really.

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