22 November 2023

Address to the Financial Advice Association of Australia Congress 2023, Adelaide


I would like to acknowledge the Kaurna people of the Adelaide Plains as the traditional custodians of the land we are meeting on.

I pay my respects to the Elders past and present, and acknowledge any First Nations Australians in attendance today.

I want to thank the FAAA, Sarah, David and the whole team. 

Congratulations again on the successful merger. I have already seen the benefits of what this merger can do as we have partnered together to engage with advisers across the country.

I’m pleased to have the opportunity to present at your first congress as a united association.

Australians need more financial advice.

Quality financial advice can make a meaningful improvement to living standards.

However, the current legal framework is constraining the provision of affordable advice.

Over the past decade or so, the financial advice sector has undergone significant change.

Much of this change has been needed.

In response to, sadly, bad practice in the sector, the regulation of financial advice has increased.

It has been necessary to shift the advice industry from being a salesforce to a profession.

And we are not going to reverse course to return to the bad days.

So if the goal has been to protect Australians from bad advice, we have generally succeeded.

But in the process of protecting Australians from bad advice, we have also protected them from good advice.

Now it would be bad enough if Australians simply got no advice.

However, it is naïve to ignore an unregulated world of information that wants to fill the advice gap.

‘Finfluencers’ at best.

Scammers at worst.

A lack of advice can quickly become the means of significant consumer harm.

Retirement income advice

And so, earlier this year, I outlined the Government’s plans to reform financial advice.

This plan is guided solely by what is best for consumers.

And this means meeting their needs with relevant and helpful advice.

The greatest need for financial advice is around retirement income.

There are over five million Australians at or approaching retirement.

And the superannuation industry has done a very good job at growing the wealth of workers across the nation.

With an average balance of over $200,000, Australians are retiring with more wealth than ever before.

Perversely, advice on how to make this wealth work for them in retirement has never been harder to get.

An effective retirement system should support Australians to both grow and draw down on their superannuation in ways that improve their quality of life.

Advice is integral to this goal.

And, for many, their advice needs are simple and one‑off.

But the Retirement Income Review found that only 26 per cent of individuals approaching retirement seek financial advice.

This need for more retirement income advice cannot be solely met by Australia’s 16,000 financial advisers.

Even if we could significantly increase the number of advisers, the math does not check out.

So the Government has made a decision that superannuation funds must play an expanded and more effective role in providing advice. 

Many of these members are unlikely to need a comprehensive financial advice plan.

But it is good for everyone if more Australians are making better‑informed financial decisions.

And it will lead to a meaningful improvement in living standards for millions.

Improving the impact of advice

While increasing the amount of advice in the economy is needed, it is important to ensure the advice is relevant and helpful.

Unfortunately, the current regulatory environment is working against that goal.

And increasing costs.

The Quality of Advice review found that the median ongoing advice fee has increased by 41 per cent between 2018 and 2021.

In part, this has been driven by the exodus of over 10,000 advisers over a similar time period.

But it is also being driven by a process‑focussed compliance culture. 

Rules that were intended to protect consumers have instead materialised as unnecessary and unused documentation at best.

At worst, these rules are leading to consumer harm where they are used primarily to protect advisers from legal action.

It is a glaring problem that a statement of advice is more likely to be read in a courtroom than around the dinner table.

Many of you tell me that the drafting of a lengthy statement of advice is a key driver of the increases in the cost of financial advice.

Yet most of the statement is never used by the person paying for it.

This is one obvious example where well‑intentioned rules are adding to the cost of advice without improving consumer outcomes. 

We can do better.

Last week, I released the first tranche of financial advice legislation.

This batch cuts red tape that adds to the cost of advice with no benefit to consumers.

For example, it will support advisers to consolidate multiple fee consent documents and reduce duplication.

And allow advisers to provide the financial services guide on their website, rather than printing it out for clients.

These are the obvious things to do where there was agreement on the way forward.

Developing better solutions with industry

And this is only the start of the reforms needed.

With the release of legislation this past week, we are on track and on time.

Further legislation will come in 2024.

This first tranche of legislation reflects the things the Government could ask the drafters to write immediately.

I know that there is eagerness to see needed changes to the statements of advice.

And you can add in the safe harbour steps as well.

Many were hoping that legislation to address these pain‑points was going to be released last week. 

To do this, we would have needed to draft changes immediately without industry input.

And hoped that they were fit‑for‑purpose.

That they would reduce red tape without risking consumer harm.

But I believe the mistakes in this policy space in the last few years could have been avoided by working with industry.

Rather than dictating to industry.

I want to make sure we make a meaningful difference that sets up the advice industry to support better outcomes for consumers.

So I reiterate that the Government is committed to replacing statements of advice.

And removing the safe harbour steps.

However, the answers are slightly more complex.

For one, the changes are interrelated.

Removing the safe harbour steps affects the content of a statement of advice.

So does expanding the advice role of superannuation funds.

We also want to ensure the information a consumer receives is relevant while being mindful of the risk appetite across the advice industry.

We also need to future‑proof any changes to different business models.

And be neutral towards the different technological modes of delivery.

So that we do this once and we do it right.

Because we cannot afford to get it wrong for the millions who need to be able to trust the process for their financial decision‑making.

So we have engaged in meaningful, but not endless, consultation.

And the input of the FAAA has been invaluable.

It is a case of when, not if.

Increasing advice in the economy

When implemented, these changes should improve the advice available to consumers.

It will be more relevant and tailored to their needs and objectives.

But there is more that can be done to improve the profession.

I would like to see more high‑quality advisers to serve the growing demand for advice.

The Government has already fulfilled its election commitment to pass legislation that retains experienced advisers in the industry.

This was a needed transitional mechanism to staunch the bleeding of advisers.

However, there is a need to increase the number of advisers beyond the 16,000 currently in the system.

This means we need to get the pathways right.

The goal of a professional industry is one that I support. 

And, like other professions, this means there is a need for a shared standard of education, competency and ethical standards.

However, many stakeholders have told me that the current pathways need more flexibility.

The legacy of FASEA looms large.

I want to call on the industry to work with me on this. 

Otherwise, the Government will simply have to cut through and set the approach. 

This may not be the outcome you want.

So it is time for pragmatic solutions. 

It is important for the profession that we get this right.

And it will be good for consumers.


Because quality financial advice is good for consumers.

So the Government is determined to increase the amount of advice they can receive.

And ensure that the advice is relevant, helpful and affordable.

We won’t forget the past. We will build on the hard‑fought improvements to consumer safeguards of FOFA and Hayne.

But we want to make it easier for you to serve your clients’ needs.

So that they can make better‑informed decisions.

And we want to work with you, not against you.

To make meaningful improvements.

To strengthen the profession.

And to deliver better financial outcomes for more Australians.