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.

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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

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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.

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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.

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THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell said a significant spike in the number of unfair dismissal claims before the Fair Work Commission was further proof the Small Business Fair Dismissal Code "is not working in the way it was originally intended".

“In 2019/20 the Fair Work Commission has received over 16,500 unfair dismissal claims – a jump of over 2,600 claims compared to the previous year and proportionally accounting for about half (49%) of the Commission’s caseload,” Ms Carnell said.

“Of course the COVID crisis has played a role in the latest figures, however over the past few years the number of claims have consistently remained at unacceptably high levels.

“It shines a light on underlying systemic issues that my office has consistently raised for years, culminating in the release of our comprehensive review of the Small Business Fair Dismissal Code in August 2019.

“To date, my office has had no formal response from the Federal Government regarding our review and the Attorney General’s promised discussion paper has not yet materialised," Ms Carnell said.

“When the Small Business Fair Dismissal Code came into effect in 2009 under the Labor Government, it was in recognition small business owners do not have the time, money or expertise to navigate the overly complex unfair dismissal system.

“However the high number of unfair dismissal claims lodged with the Fair Work Commission is a clear indication that too many small businesses are being pulled into costly and time-consuming unfair dismissal hearings. Our review of the Code seeks to ensure the Labor Government’s vision for the Code is realised," she said.

“The proposed changes to the Code as recommended in our review, focus on the obligations of employers to their employees and do not impact on the rights of employees at all.

“Ultimately we want the Code to work, so that small businesses understand and meet their obligations so there is no need to engage lawyers.

“It is critical the Code drives fairness and sets out clear expectations for small business employers.”

Ms Carnell said the Small Business Fair Dismissal Code was formed as part of “Forward with Fairness: Labor’s plan for fairer and more productive Australian workplaces”.

Forward with Fairness: Labor’s plan for fairer and more productive Australian workplaces states: “The Code will be tailored to the needs of small business and will be reduced to a clear and concise reference to help these employers meet their obligations under Labor’s simpler unfair dismissal system. Where a small business employer has genuinely complied with the Code, the dismissal will be considered a fair dismissal”.

When the Code came into effect in 2009 under the Labor Government, the interpretation of the Code was challenged in the courts and, on occasion, by members of the Fair Work Commission. That created uncertainty for small business employers, as following the Code was no longer a reliable way of ensuring a dismissal was going to be deemed fair.

In April 2018, the Australian Small Business and Family Enterprise Ombudsman released its report Workplace Relations- Simplification for Small Business. That report recommended ASBFEO lead a review of the Small Business Fair Dismissal Code and checklist.

www.asbfeo.gov.au

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THE ACCOUNTING profession supports the way Australian governments have managed COVID-19, but urges greater national unity and transparency, according to CPA Australia.

In October, CPA Australia, which is one of the world’s largest accounting bodies, conducted an online survey of 644 members to ascertain their attitudes to government responses to COVID-19. The survey results provide statistically robust evidence to inform the organisation’s ongoing policy and advocacy activities in response to COVID-19.

CPA Australia general manager for external affairs, Jane Rennie said, “CPA Australia members have a strong sense of public interest, and this was reflected in their responses. Respondents ranked public health as the single highest priority, followed by long-term economic recovery planning. Taken together, long-term and short-term economic recovery planning outranked public health as a priority.

“Although a majority of respondents believed that border closures have contributed positively to public health, the vast majority thought they have had a negative impact on the Australian economy.”

At a national level, 71.5 percent of respondents rated the Federal Government’s response to the pandemic as ‘good’ or ‘very good’. Respondents were more mixed about the impact and effectiveness of state government actions.

The Victorian Government’s response to the pandemic was more polarising. Victorian-based respondents were frustrated by a perceived lack of decision-making consistency and transparency in that state.

“The prolonged lockdown has undoubtedly contributed to a more pessimistic view of government decision making in Victoria," Dr Rennie said.

“Overall optimism regarding business conditions, employment conditions and the economy is not high; 73 percent of Victorians were not optimistic or only slightly optimistic about business conditions, compared with 60 percent of other Australians on the same measure.”

Regardless of their state of residence, respondents wanted governments at all levels to show greater national unity when responding to the impacts of the pandemic.

“Over 86 percent of respondents rated having a unified national approach as ‘very’ or ‘extremely important’ for managing COVID-19,” Dr Rennie said.

“Having multiple state and national approaches was not viewed favourably by respondents and was seen by some as associated with political game playing.”

In comments provided, several respondents also highlighted the need for increased transparency and clarity of government announcements, to assist individuals and businesses to understand how announced measures apply.

About CPA Australia

CPA Australia is one of the world's largest accounting bodies, with more than 166,000 members working in 100 countries and regions and supported by 19 offices globally. Core services to members include education, training, technical support and advocacy. Employees and members work together with local and international bodies to represent the views and concerns of the profession to governments, regulators, industries, academia and the community. cpaaustralia.com.au\

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THE NUMBER of jobs supported by the resources industry in Queensland has now reached 420,000, following the release of new data showing an extra 50,000 jobs have been created by the sector in the past financial year.

The Queensland Resources Council today released industry figures confirming mining, gas and energy companies added a record $82.6 billion to the state economy in 2019-20, representing a $5 billion increase on the year before.

QRC chief executive Ian Macfarlane said the latest data showed one in every five dollars in the state economy and one in six jobs are due to the Qld mining and gas industry, highlighting the significance of the sector to every Queenslander’s hip pocket.

“The overall number of jobs supported by resources in Queensland has risen by 13 percent since June last year, increasing from 372,000 to 420,000-plus people now working across our sector,” Mr Macfarlane said.

“Of these, 52,676 people are directly employed in resources and a further 367,493 jobs are supported by the sector, which emphasises the significant flow-on benefits to the wider community from having a strong resources industry in Queensland.

“This is more important than ever as Queensland businesses continue to battle the headwinds of COVID.”

The number of Queensland businesses directly supported by mining, gas and energy companies rose by 5 percent since June last year from 14,400 to reach 15,199, with companies reporting a 19 percent increase in spending during this period.

Mr Macfarlane said resources remained a huge contributor to the Queensland economy and to job security across the state, and he urged voters to take this into account as they head to the polls.

“The QRC has been running a Protect Your Job campaign during the state election to make people aware of the economic importance of resources to Queensland, and to encourage voters to back candidates who will protect jobs and support the mining and gas industry,” he said.

“On top of the billions of dollars resources contributes to the state economy each year, our companies also pay Australia’s highest royalty tax rates, which collected $4.5 billion last year for the Queensland Government.

“This money goes directly into the state budget to fund teachers, nurses, doctors, hospitals, schools and roads so that gives billions of reasons for voters to back candidates who support the resources sector.”

The latest QRC figures show Brisbane has maintained its position as Queensland’s largest mining town with McConnel, Clayfield, Cooper and South Brisbane being in the top 10 electorates to benefit economically from the resources industry.

Mr Macfarlane said he hoped voters in these Brisbane seats will vote to protect their jobs and back local candidates who value and support the resources sector.

The top 10 Queensland electorates ranked in order of economic contribution are McConnel, Mackay, Burdekin, Gladstone, Gregory, Whitsunday, Clayfield, Cooper, Mirani and South Brisbane.

Collectively these 10 seats contribute a massive $46.3 billion to the Queensland economy and support the jobs of nearly 244,000 Queenslanders.

www.qrc.org.au

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A MILLION Queenslanders working in the state’s major industries have urged all political parties to prioritise the 'Three Rs' – Revenue, Regions, and Regulation that is reasonable – to ensure the state's continued strong growth.

The five industries – agriculture, mining and gas, tourism, timber and property – collectively employ one in three Queenslanders. AgForce, Queensland Resources Council (QRC), Queensland Tourism Industry Council (QTIC), Property Council of Australia (PC) and Timber Queensland (TQ) have joined forces to call on the next State Government to prioritise the Three Rs "to ensure a strong post-COVID recovery".

At a time when Queensland has recorded Australia’s highest unemployment rate, with forecasts it will rise to nine percent, the five peak organisations have established common ground and United for Recovery on behalf of their sectors and the community. They are calling on the next Queensland Government to commit to developing the state’s regions, stabilising the Budget and collaborating effectively with industry bodies on regulation.

AgForce general president Georgie Somerset said regional Queensland was the engine room of the state’s economy and needed appropriate policy settings to be able to deliver maximum value for all Queenslanders.

“Agriculture – driven by around 18,000 primarily family-owned farms who feed and clothe us – pumps $18 billion into the economy annually and is the cornerstone of thousands of rural and regional communities,” Mrs Somerset said.

QRC chief executive Ian Macfarlane said each industry body shared the view that keeping Queenslanders earning, working and contributing to the state economy was the best way to respond to and overcome the challenges of COVID-19.

“The Queensland resources industry contributed $74 billion to the state economy last year and supported the jobs of 372,000 people, so we’re asking the next government to work closely with our sector for the benefit of all Queenslanders to create more jobs and stimulate a strong economic recovery from COVID,” Mr Macfarlane said.

QTIC CEO Daniel Gschwind said tourism delivered vital economic benefits to regional communities that supported thousands of jobs in all parts of the state.

“A partnership with government is critical to develop catalytic infrastructure and provide an efficient regulatory framework to fully activate tourism’s potential for the recovery,” Mr Gschwind said.

PC’s Queensland executive director Chris Mountford said unlocking private sector investment must be at the forefront of any new government's agenda.

"The private sector is ready and willing to invest and create new jobs in Queensland, however without the right tax settings in place, that investment will find a new home elsewhere," Mr Mountford said.

TQ CEO Mick Stephens said the forest products industry supported many regional jobs and delivered much needed timber supply into the state’s building and construction sector.

“Having more certainty around regulation and infrastructure will improve the investment environment and allow the industry to grow and further contribute to regional jobs and prosperity,” Mr Stephens said.

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