Govt failed on financial advice reforms: Labor

The Government has failed to effectively deliver professional standards reform in the financial advice sectors and has been too slow to implement findings from the Royal Commission, according to a Labor senator.

Speaking in the Senate about the Better Advice Bill, Labor senator Katy Gallagher said the Government’s handling of the Financial Standards and Ethics Authority (FASEA) failed to produce standards that were in any way timely or done in an adequate fashion.

“Advisers were subjected to changes and complications to the exam process. When it comes to these advisers, and I had the opportunity to speak to a few of them recently, it's astounding how the government has been treating them,” Gallagher said.

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“Particularly in the design and implementation of professional standards and how this will potentially impact on experienced advisers who may be forced out of the industry, taking away their many years of knowledge about how best to serve their clients.

“…That's why the member for Whitlam has written to the Treasurer to demand that he review ASIC's [the Australian Securities and Investments Commission’s] industry funding model and to call for a greater recognition of specialisations and experience in the educational and exam standards for the many callings across the financial advice industry.”

The second reading amendment for the bill was moved by Gallagher but said the Senate noted the Government had:

  • Failed to effectively deliver professional standards reform in the financial advice sector;
  • Been too slow to implement the findings of the Hayne Royal Commission;
  • Established and then shut down the failed FASEA regime;
  • Failed to adequately protect consumers; and
  • Caused uncertainty and unnecessary costs for thousands of financial advisers across Australia.

Liberal senator, Slade Brockman, said royal commissions were effectively reports to government and to society and were not “tablets handed down from on high in stone”.

“They need to be considered. They need to be considered in the light of the existing regulatory framework. They need to be considered in the light of practicality. They need to be considered in the light of regulatory burden that's already placed on a particular industry in the interim,” he said.

“It's very important that we take our deliberative role in this place and the role of executive government seriously and actually consider what's coming out of royal commissions—the way the recommendations should be implemented to make them work in practice—and recognise the reality of industries as they operate on the ground.”

Brockman noted the vast majority of people working in the financial advice industry did not act in a way that the “many egregious ones did”.

“However, there is a need to simplify the regulatory system, and this bill does that by increasing regulatory alignment. In particular, this bill includes creating a single disciplinary model, moving the standard-setting functions to the government, introducing annual registration requirements and removing duplicate regulation for tax advisers,” Brockman said.

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You can't have it both ways Katy. It is impossible to focus on implementation of Hayne's recommendations, while at the same time adequately protecting consumers.

Hayne's recommendations have done more harm to consumers than good. They have tied professional advisers up in costly, time consuming red tape that makes it harder for consumers to access their services. Consequently more consumers have been lured into the clutches of unregulated shonks and dodgy products. Even worse than that, Hayne failed to make the obvious recommendations that would have provided much more consumer protection, such as banning vertical integration. Hayne was brilliant as ringmaster of a media circus. But he was hopeless at recommending good reforms to protect consumers.

Exactly. To make all those recommendations and not make the most obvious and impactful one, to ban vertical integration, meant he was either incompetent or conflicted.

Exactly, old Kenny boy either was too stupid or too conflicted to see the ELEPHANT IN THE ROOM = VERTICAL INTEGRATION.
HAD KENNY BOY had any idea or any balls he would have killed vertical integration.
He didn't and we are stuck with more utter Red Tape madness to allow conflicted Advisers / Super Funds to try to disclose their way out of the impossible conflicts of Vertical integration.
Yet even ASIC admit 20 years of ever increasing disclosure hasn't worked - but that wont stop ASIC loading up more disclosure.
Kenny Boy you stink.
Ms Press you really stink.
Frydenberg you stink beyond belief.

the advisers that remain are more often than not saying no to serving clients.

when they do say yes, their fee to do so has doubled.

this is only going to get worse.

Worse? Less clients, higher fees, less 'idiots' in the remaining competition and generally seeing a better class of clients coming through the door.

As callous as this sounds (which is simply commercial realism), these are actually good times for those that can remain.

War makes more millionaires than times of peace. Trenches were dug back when Keating & Hawke craftily & subliminally pulled that masterstroke of profiteering their union cohorts with a free pass to billions in compulsory super. Not a Labor supporter, but have to give credit for the foresight.

Despite being in the minority based on other posts I agree with you. Times will be good for planners and firms that can survive the acutely harsh Darwinian process being shoved down our throats. Better times will come but you need the patience of Jobe.

I actually googled it:

"To have an immense and unyielding degree of patience and conviction, especially in the face of problems or difficulty. A reference to the biblical figure Job, whose absolute faith in God remained unshaken despite the numerous afflictions set upon himself, his family, and his estate by Satan."

In our case SATAN = ASIC.

ha ha.

our industry is funny. asic will read 240 submissions from financial planners and do something totally opposite. just wait till you see their unmet advice report/document.

Well said :)

There should be a Royal Commission in to the Hayne Royal Commission!

I started reading this with some optimism, then found myself going downhill quickly. Hayne was a fool and a patsy, no clue as to how he was coerced into playing right into the hands of the very organisations he was pointing the finger on. And Labor wants to continue the destruction started by the Liberals.

More evidence Labor has woken up and realised there are significant votes available if they play their cards right. Let's hope this translates into election promises

I would wish for you to be correct. However if you remember the gravy train for the labor party and the old hacks is directorships and industry fund positions and the millions in bonuses handed out (published just this week).

We are on our own George. First it was the insto's that beat up the little guys, then industry funds, then ASIC, FASEA. A conga line of corruption, self interest, ignorant prejudice and money grubbers.

And all the while we are painted as the bad guys.

You either have to laugh, cry or take to the bottle. I resorted to two of those...LOL.

Wow. Every comment I agree with. Kenneth Hayne didn’t follow his given task and achieved what he wasn’t to do. Shutting down a valued service to Australians. He has missed the industry super issues n allowed them to continue to breach regulations and given a lift to the low quality direct market. I’m out after 31 years and held CFP ALSO. I’m thankful to be out of the stupidity but sad I can no longer help people n see the awesome results that no one can now do. The claims outcomes I seen will never be seen again. Eg. Ager three planners before me (bank planners looking after tpd claim with them) I was able to find a additional 240,000 for client. Obviously the compliance was too high fir the others to process and they would have known it was there. Happy banks are out but sad for the rest of industry excluding industry

Labor started this mess with the Rippoll report (Bernie being staunch Labor, so no bias there?) villainising planners as essentially the cause of all financial ills and failures. Gillard et al perpetuated this during their time in office with Shorten (wife at exec level of ISA) pushing hard against us on the senate floor and not forgetting that Former Labor minister and ACTU secretary Greg Combet has taken a leadership role in the $630 billion industry superannuation sector...

Labor bayed for blood when the LNP initially attempted to block the farcical Royal Commission. They again cackled like crack injected hyenas when the LNP didn't immediately say they would introduce every single one of that inept fool Hayne's recommendations.

Idiots on here like Jo'Son & the AIOFP are all too willing to take the lies spewing from Labor's media machine as a panacea to our challenges and 'better times to come' under their Gov. I am sure there were a number of incarcerated during WWII who also believed the Nazis and that the 'showers' would help rid them of lice and other ailments. I suppose in a way it did, but not how they would have preferred.

(And if anyone is 'offended' at my WWII reference, grow the f*ck up. What does it feel like to be so weak that mere words hurt you?)

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