THE Financial Services Council (FSC) has launched a research report by Rice Warner which offers some radical ideas for restructuring the model for financial advice which will start a policy debate on how to make advice more affordable and accessible.

Rice Warner proposes a future financial advice model which includes:

• All advice to be one of two categories – strategic advice and financial product advice;
• New definitions of financial advice – general information; and personal advice separated into simple personal advice, complex personal advice, and specialised advice;
• New principles to refocus the system – simplification, affordability, accessibility, consistency, and quality of advice;
• Less documentation – for example, allowing a Fact Find and a Record of Advice for the provision of Simple Personal Advice;
• Realistic and less costly levels of compliance; and
• Tax deductibility for financial advice.

FSC CEO Sally Loane said, “Quality financial advice is needed now more than ever as the economic impacts of the coronavirus pandemic are felt by individuals right across the nation. The Rice Warner Future of Advice report starts an important policy debate on how we can re-build a simpler and more affordable advice industry.

“Rice Warner’s research examines both the need for advice, and the value of advice. It shows evident benefits of financial advice to the health and wellbeing of individual consumers, as well broader economic benefits such as reduced long-term expenditure on the age pension,” Ms Loane said.

The FSC will consider Rice Warner’s research as well as engaging extensively with stakeholders, including Australia’s financial advisers, ahead of launching a policy document or Green Paper on Financial Advice next year, a critical step in policy development.

“The aim is to build a new model for financial advice which not only makes professional quality advice more affordable and accessible for consumers, but also removes the mass of costly compliance and regulatory burden on the sector," Ms Loane said.

“With advisers leaving the industry in record levels –  Rice Warner reports 15 percent last year and an anticipated fall of a further 36 percent over the next five years – we need to act now to change the system.”

A full copy of the report can be downloaded here.

About the Financial Services Council

The Financial Services Council (FSC) has more than 100 members representing Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks and licensed trustee companies. The industry is responsible for investing almost $3 trillion on behalf of more than 15.6 million Australians. The pool of funds under management is larger than Australia’s GDP and the capitalisation of the Australian Securities Exchange and is the fourth largest pool of managed funds in the world.

ends

THE Queensland Resources Council has welcomed today’s commitment by the LNP that if elected it would work closely with the resources sector to get Queensland jobs and the economy back on track post-COVID.

As the peak body for Queensland’s coal, metals and gas explorers, producers and suppliers, the QRC has spent months seeking comprehensive commitments from both major parties and key crossbenchers in the lead-up to the state election this Saturday.

QRC chief executive Ian Macfarlane said the LNP had been very clear about its support for the resources sector during its election campaign and had acknowledged the key role resources has played during COVID to maintain production levels and keep tens of thousands of employees working and earning.

“New economic contribution data shows the mining, gas and energy sector supports one in five jobs across Queensland and has been a bedrock of financial support and stability for the state economy during COVID-19,” Mr Macfarlane said.

The QRC has welcomed the LNP’s commitment to:

• open the Galilee Basin to develop $50 billion worth of projects;
• a new Queensland Infrastructure Fund to collect and invest royalties from the Galilee Basin in new state infrastructure;
• maintain current royalty rates for coal, metals and gas for 10 years;
• grant approvals for New Hope’s New Acland Stage 3 project;
• appoint a Queensland Resources Industry Commissioner to promote the state to international investors;
• implement an industry development plan to support the sector’s future growth;
• encourage exploration to uncover new discoveries for coal, metals and gas;
• commit to a 12-week consultation period on regulatory changes that may impact on the sector;
• streamline assessment and approval processes for new and expanded projects;
• promote the development of the North West Minerals Province, particularly for critical minerals to support the growth of advanced manufacturing, battery storage and renewable energy; and
• progress the CopperString project in the state’s North West in partnership with the Federal Government.

Mr Macfarlane also welcomed the LNP’s commitment to not form a minority government or enter a power-sharing agreement with the Greens, whose policies would jeopardise the sector’s viability and push those Queenslanders who work in or because of the resources industry out of work. 

“The Greens believe it’s their job to cost hard-working Queenslanders theirs,” Mr Macfarlane said.

“The Greens have promised to increase royalty taxes imposed on the industry by five times, making the industry and those jobs unviable.”

Mr Macfarlane said the Katter Australia Party and its leader Robbie Katter had also been a strong advocate for the resources sector and had endorsed key elements of the QRC’s election agenda including the 10-year royalty freeze, streamlined approval and assessment processes and an industry development plan.

www.qrc.org.au

ends

A NEW REPORT into Australia’s mandatory data retention regime recommends the Federal Government implement a number of changes aimed to increasing transparency.

Andrew Hastie, chair of the Parliament’s Intelligence and Security Committee, said the report's 22 recommendations increase transparency around the use of the mandatory data retention and increase the threshold for when data can be accessed. In addition, the committee make recommendations that reduce the currently very broad access to telecommunications data under the Telecommunications Act.

"Our recommendations are aimed at improving mandatory data retention in a way that does not have a great effect on law enforcement and ASIO’s ability to do their very important work," Mr Hastie said.

"Importantly, the committee has not recommended any change to the existing two year period of data retention."

The report’s 22 recommendations include:

• access to data kept under the mandatory data retention regime will only be available under specific circumstances;
• the Department of Home Affairs develop guidelines for data collection including an ability for enforcement agencies and Home Affairs to produce reports to oversight agencies or Parliament when requested;
• the repeal of section 280(1)(b) of the Telecommunications Act which allows for access where ‘disclosure or use is required or authorised by or under law.’ It is the broad language in this subsection that has allowed the access that concerned the committee.

Mr Hastie said the review, conducted in accordance with Section 187N of the Telecommunications (Interception and Access) Act 1979, is the seventh full inquiry the Intelligence and Security Committee has completed in 2020.

"Despite the challenges of 2020 I am pleased with the high volume of work completed by the committee," Mr Hastie said.

"As the security environment continues to change, the scope and the role of the committee has expanded, as has the workload. I look forward in particular to the publication of the Richardson review, which will shape the framework of both the Australian intelligence community and its oversight bodies, including this committee."

The full report can be read or downloaded from the committee’s website.

ends

THE 50 most influential financial advisers in Australia for 2020 have been named by financial services trade publication, Financial Standard, in its annual FS Power50 guide.

The list, comprising 31 men and 19 women, is a diverse group of professionals nominated by readers of the Financial Standard for their unique efforts to create a blueprint for the future of financial advice.

“The Power50 exemplify the best aspects of the advice industry and how it is set to change," Jamie Williamson, editor of Financial Standard, said. "Some are influencing the advice industry, be it through regulatory bodies or peer groups, others are influencing the delivery of advice and the client experience through technology and innovative business models.”

"And others are leveraging their role as an adviser to make a meaningful difference in their community or communities abroad,” Mr Williamson said.

“To make it on to this list is no mean feat and all that are featured should be proud of their achievement.”

The purpose of the guide is to raise awareness, in the eyes of the Australian public and the advice industry itself, for the advisers who are playing a key role in shaping the future of financial advice.

Financial advisers have managed to deliver value of 5.2 percent or more each year to clients, according to new research from Russell Investments.¹

Furthermore, twice as many Australians are seeking financial advice as they were five years ago, according to research from Investment Trends.²

“Highlighting the talent within the advice industry is more important than ever in an environment where trust in the sector remains low despite the growing need for quality advice,” Mr Williamson said.

“The FS Power50 badge is synonymous with the best the industry has to offer.”

Nominations for the list are sourced from the Financial Standard audience, as well as the Financial Standard editorial team.

A shortlist is selected by Financial Standard before industry voting begins. This year hundreds of nominations were considered and almost 6000 votes determined the final list.

Both the Financial Planning Association of Australia (FPA) and Association of Financial Advisers (AFA) screened the list before it was published.

2020 saw plenty of change in the list of the most influential advisers, with 23 advisers appearing in the FS Power50 for the first time.

Similarly, the movement within the advice industry was reflected in the FS Power50, with 32 percent of this year’s list belonging to an advice group with more than 100 advisers, down 22 percent in two years.

This aligns with the trend of advisers moving away from larger, institutional groups, into non-aligned groups, with the number of institutionally aligned advisers falling by 25 percent in the year to June 2020, according to Rainmaker Information.³

“At a time when so much focus is on the impact of industry change and diminishing adviser numbers, Financial Standard is proud to showcase excellence in advice and celebrate just how bright the future of advice is,” Mr Williamson said.

“Congratulations to the 2020 FS Power50.”

Click here to view more on the 2020 FS Power50.

1. Russell Investments' Value of an Adviser Report 2020, www.financialstandard.com.au/news/through-good-and-bad-advisers-add-value-175803481
2. Investment Trends Financial Advice Report, www.financialstandard.com.au/news/demand-for-advice-rises-172546141
3. Rainmaker Information Financial Adviser Report, Volume 01, Issue 02.

ends