‘Step up or step out’, Howarth tells Jones

Stephen Jones Luke Howarth quality of advice review Parliament Budget

7 June 2024
| By Laura Dew |
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Shadow minister for financial services, Luke Howarth, has described his counterpart Stephen Jones as being “asleep at the wheel” when it comes to financial advice.

Howarth, who was appointed to the position in March 2024 to replace Stuart Robert, asked four questions of Jones in Parliament on 5 June regarding changes in the latest federal budget. 

These covered the cost of advice and how changes in the budget, which will likely bring in additional costs, correspond with the stated aims of the Quality of Advice Review to reduce costs.

The four questions were:

  1. The budget includes several measures that will require additional ASIC levies on page 71, 179, 181 and 184 of budget paper 2. How much of these additional ASIC levies will be paid for by financial advisers?
  2. On page 180 of budget paper 1, GST receipts in 2023–24 were upgraded from the MYEFO estimate of $84,079 million to $85,758 million. Does this upgrade include increased receipts due to the ATO’s revised interpretation of eligibility for trustees to claim the reduced input tax credit for GST on fees paid for financial advice?
  3.  Industry estimated that GST receipts have increased by $250 million because of the ATO’s new interpretation. Does that account with your estimate?
  4. Does the situation accord with the government’s stated aim of reducing the cost of financial advice and increasing accessibility for Australians?

He said: “Stephen Jones is asleep at the wheel when it comes to the budget’s impact on the cost of financial advice.

“Australians deserve better than a government that promises to reduce the cost of financial advice but has in practice presided over a hot mess of a budget that is pushing up the cost of financial advice.

“Adding additional costs to financial advisers won’t help ordinary Australians that need financial advice now.

“It’s time for Stephen Jones to step up or step out.”

His comments came as almost a year approaches since the publication of the government’s first formal response following the Quality of Advice Review which was issued on 13 June 2023. This was followed by a second formal response covering tranche two of the reforms on 7 December 2023. 

The first covered removing red tape that adds to the cost of advice, exploring new channels for advice and expanding access to retirement income advice. The second looked at superannuation funds, banks and insurers giving advice, changes to Statements of Advice and the possibility of a new type of adviser called “qualified adviser”.

A public hearing on the Delivering Better Financial Outcomes legislation, which builds on Michelle Levy’s Quality of Advice Review, is due to be held on 13 June.

Jones has committed to passing the legislation by May 2025 ahead of the next federal election.

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Submitted by Tony Densley on Mon, 2024-06-10 09:27

How can the quality of advice be improved by reducing the information provided in the Statement of Advice? Further to this the advice being given by unqualified sales people will not improve the quality. It is blatantly clear Jones and his ilk are looking to drive private financial advisers out of the industry so they get their mates in the industry funds, banks etc back into controliing where and how australians invest to build their retirement. Once the private sector is gone ALL control will be in the governments, unions and banks control and heaven help the average australian then !!

Submitted by Shane Bond on Tue, 2024-06-11 00:33

Why can’t we get personal feedback on the Asic exam
Mr Jones promised me that some 18 months ago in front of a large breakfast crowd at the Hyatt in Collins
Haven’t heard a thing since-I am not sure if he understands our industry

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