As it makes its way through Parliament, the Better Advice Bill has become something of a lightning rod for discussions about the state of financial advice – and the Government’s role in it.
While the Bill ultimately passed through the lower house, it was met with fierce criticism from certain members of Parliament – most notably Labor MP Julian Hill, who described it as a “stunning admission of failure. Hill said the Government’s implementation (and subsequent dissolution) of FASEA was “characterised by a litany of stuff-ups and mistakes,” pointing to the education body’s leadership turnover and the fact that “standards were released for financial advisers just days before they were supposed to take effect.”
He also suggested FASEA would be a strong contender in “an Olympics for implementation failure.”
Commenting on the prospects for the post-FASEA standards authority jointly run by Treasury and ASIC, Hill said it was “difficult to fully judge” because “there have been no draft regulations published or provided.”
Hill continued: “The government have treated this profession appallingly … Through their sheer incompetence, they’ve ignored and harmed people they’ve actually always claimed as part of their own Liberal Party constituency. If that’s how they treat their friends! More than 4,000 experienced advisers have left the sector in just under three years.
“About 50 per cent of advisers have gone, many estimates suggest, with projections that more are yet to leave in the near future. That gap means, with a smaller pool of financial advisers and a higher demand for financial advice, everyday Australians are simply being priced out of the market — or left to TikTok influencers.”
Indeed, as we’ve discussed before, social media platforms like TikTok have become an increasingly popular channel for (what could loosely be described as) financial advice. Even though TikTok itself banned promotions of financial products and services in July, LendingTree research from earlier this year suggested up to 15% of millennials and 46% of zoomers were regularly using the service for investment information, and it’s likely those appetites have simply been directed elsewhere following the ban.
Despite concerns from multiple regulators throughout the world (including ASIC), the popular narrative is that Government hasn’t appeared too interested in seriously addressing the issue. Reflecting this, Senator Jane Hume told the audience at a Stockbrokers and Financial Advisers Association conference in May that “the TikTok influencer spruiking Nokia is not that different to the bloke down at the pub who wants to tell you all about the really great company he just invested in but with a much louder voice.”
Unless greater strides are made towards addressing some of the primary cited reasons for the mass exodus of advisers from the industry, though, the voice of that “bloke down the pub” is going to get even louder.
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