However, their sentiments have changed since reading Jones' recent announcement. In an effort to create a new "class" of financial adviser called the "qualified adviser," banks and insurers will now be allowed to provide financial advice alongside superannuation funds. This development has left many advisers disheartened, as it raises concerns about consumer confusion and the status of those who have worked hard to achieve professional qualifications.
The Financial Advice Association of Australia (FAAA) has expressed deep concern over the government's announcement, and even members of the Association of Independently Owned Financial Professionals, who were once confident in Jones' approach, are now expressing reservations.
Based on the available evidence, it seems that financial advisers have been caught in a tight spot. The government is striving to deliver affordable financial advice, not only by empowering superannuation funds but also by bringing banks and insurance companies back into the equation through limited advice offerings.
Jones attempted to prepare key stakeholders for this announcement by pre-briefing them, resulting in early statements urging the adoption of limited advice. He then tried to alleviate financial planner concerns by suggesting that "qualified advisers" can be managed appropriately.
According to Jones, qualified advisers will focus on providing simple financial advice and will generally be employees of licensed financial institutions. They will be prohibited from charging fees or receiving commissions, restricting their advice to simpler matters. Additionally, they will be required to meet a government-mandated education standard, likely starting with a minimum diploma requirement.
However, what Jones didn't acknowledge is that this new system allows banks to operate both at the top and bottom ends of the financial advice spectrum while bypassing regulation in the middle. They can offer limited advice to low-balance clients while providing private-banker wholesale advice to high net worth individuals. Bank boards will see this as an advantageous outcome.
The major insurers also benefit from this arrangement, as they now have a means of advising clients on their products, even if they have divested ownership of financial planning groups.
While the government's approach may have its merits, financial advisers are justified in questioning why they had to endure initiatives like the Future of Finance Advice (FoFA), the Life Insurance Framework (LIF), the Royal Commission, and the Financial Adviser Standards and Ethics Authority regime, only for these latest developments to potentially unwind progress made over the past decade.
It remains to be seen how these changes will unfold, but financial advisers have every right to seek clarity and reassurance.
