If you were expecting any substantial relief measures for advisers in the 2023-24 Budget, brace for disappointment.
Even an extension on the ASIC levy freeze was off the table, despite the ongoing review of the industry funding model. As Financial Advice Association of Australia (FAAA) CEO Sarah Abood noted, “The costs for advice businesses continue to rise and it is a high priority to minimise the impact of the levy being unfrozen from the current financial year.”
She added: “A great way to make financial advice more affordable for consumers is to reduce the business costs involved in the provision of advice – and this is one important way the government can assist.”
While the lack of attention paid to the advice sector isn’t exactly unprecedented – last year’s Budget was similarly bereft of good news – it’s notable for two reasons. First, this Government was ostensibly committed to prioritising advice reform immediately after last year’s election (or within the first three months). As Minister for Financial Services Stephen Jones put it at the time: “Let’s fix the hot mess now.”
Second, and perhaps more importantly given the inherent “fluidity” of campaign promises, the Budget arrives at a time when the Government is already being criticised for its response (or lack thereof) to the Quality of Advice review. Even the reviewer herself, Michelle Levy, recently penned an open letter expressing concern that her recommendations were “languishing on the minister’s iPad.”
It might not be reasonable to expect overnight implementation of Levy’s most significant recommendations, but that doesn’t mean the Government is powerless to address advisers’ immediate concerns. As above, the industry was hit with two consecutive ASIC levy spikes before costs were frozen and restored to 2018-19 levels – now that the freeze has expired, there’s no guarantee that this won’t happen again.
Parts of the industry might also appreciate clarity on the experience pathway, which was floated by Labor back in 2021 and recently opened for consultation. In a submission, Stockbrokers and Investment Advisers Association CEO Judith Fox noted that “most stockbrokers and investment advisers put their education on hold in light of the Minister’s election commitment to introduce an experienced pathway and an expanded qualification pathway.”
“For advisers who have to study six to eight units,” she added, “unless they commence or recommence study for those units now, they will not be able to complete them in time to meet the deadline.”
Even if the Budget wasn’t the ideal opportunity for the Government to demonstrate its commitment to “fixing the hot mess”, it would’ve been a good start.
