Search by:NameLocation
 
 

Media

In Brief: July Edition  

Do you have a good advice story?

Are you an adviser with a customer who'd like to tell their story how your advice helped them?

Are you a customer with a good story about how advice has added value to your life?

Tell us about it

Insignia, DBFO, CSLR and Cbus dominate 2024 coverage

« back to media

19 December 2024 by Beata Kuczynska and Chris Dastoor, Professional Planner

Article link: https://www.professionalplanner.com.au/2024/12/insignia-dbfo-cslr-and-cbus-dominate-2024-coverage/

The last full year of the first Albanese Labor government presiding over the financial services system was marked by rising costs of doing business, rather than the savings that were keenly anticipated in the lead up to the election in 2022.

Progress on the Quality of Advice Review recommendations, renamed as Delivering Better Financial Outcomes, dominated the news, with the first legislation passing Parliament in the middle of the year.

After winning the federal election in May 2022, two months after the previous Coalition government had launched the QAR led by Allens partner Michelle Levy, newly crowned Minister for Financial Service Stephen Jones initially let the review run without interference.

But then 2023 was defined by a long-winded consultation process. Veterans in the industry knew the QAR reforms would take years to implement, regardless of who led the political process, but this wasn’t enough to satisfy an advice populace that had been promised swift gratification.

It wasn’t until near the end of 2023 that Jones presented his full suite of proposals, which led us into 2024, the final full year of the first term of the Albanese Labor government before the next election.

The process of implementing DBFO has been far from smooth, with issues over mandating a fee consent form, how financial services guides can be provided, general insurance commissions, and onerous requirements for super fund trustees to check advice files all needing to be rectified during the legislative process.

And that was only the first tranche of legislation, which covered just a handful of the full suite of QAR proposals. Ultimately, this first crack at legislating DBFO ran into trouble on every recommendation it tried to enact.

At the start of December the minister unveiled more details on the tranche two legislation. But at the time of writing, we still had not seen a draft bill.

Outside of regulatory reform, 2024 marked the end of institutional ownership of major advice licensees. Insignia had announced divestment of most of its licensees in 2023, which was completed at the start of the financial year. But more notable for the embattled wealth giant was the appointment of Scott Hartley as chief executive to replace Renato Mota.

The Hartley era so far has been far from tranquil, as he has dealt with remediation issues, a planned restructure, and the recently announced staff cutbacks and outsourcing.

This year also marked AMP divesting from its loss-marking advice arm with Entireti picking up the licensees, and AZ NGA acquiring equity stakes in several underlying practices.

After years of going through the legislative process, the Compensation Scheme of Last Resort commenced during the year, and advisers were soon caught off-guard after finding out the government would only cover the first three months of the scheme.

An influx of complaints from clients of the now-defunct Dixon Advisory meant the first adviser levy for the scheme quickly reached the $20 million sub-sector cap. This set up a potential political showdown in the lead-up to the next election, with the Opposition saying it is open to halving the cap to assist advice practices battling rising business costs.

Most-read for the year

Honourable mentions for just missing out on the top 10 most-read stories of the year included Koda Capital for its “Pathway to Partnership” program for Professional Year advisers; the $50 million settlement that concluded OnePath’s class action and closed another chapter on misconduct uncovered during the Hayne royal commission; and shareholder fury at the leadership of Perpetual during the proposed sale of key assets to KKR.

  1. ‘Huge victory for common sense’: Advice sector gets DBFO win

The first tranche of DBFO reforms passed after months of disagreements over the implementation of changes to s99FA of the Superannuation Industry (Supervision) Act. The controversial changes raised concerns in the advice sector that the bill could lead to trustees being required to check every SOA issued to fund members.

  1. Insignia reveals ‘greatly needed’ corporate restructure

The beginning of the Hartley era at Insignia Financial saw a refresh of its operating structure. The business was restructured to operate along four reporting lines: advice, management, superannuation/master trust, and platforms. Three AMP executives joined the Insignia ranks, including chief marketing officer Renee Howie as chief customer officer.

  1. Principals’ Community warns on advice salary expectations

Despite media reports claiming an increase in advice salaries from 2023 to 2024, Principals’ Community managing director Kon Costas recommended advisers temper their salary expectations. According to Principals’ Community data, the national average for salary growth over the year was 6 per cent for advisers and 4 per cent for senior advisers.

  1. Coalition reference to 401(k) ignites fears of voluntary super

Shadow Treasurer Angus Taylor sparked concerns about the return of voluntary super in a lecture at the University of Sydney when he described the Coalition’s ambition to “[align] superannuation with other global retirement schemes, like 401(k)”. First reported by Conexus Financial publications, the invocation of the voluntary US  system suggested an approach where a retirement plan is a “perk” not a right, potentially undermining the Australian default and compulsory system.

  1. UniSuper ‘ready to roll’ with expanded financial advice model

Following the government’s response to the Quality of Advice Review, UniSuper head of advice and education Andrew Gregory announced the fund’s strategy to expand its financial advice offering. It included the development of a career path for advisers in the super fund sector and the introduction of more advanced technology to “digitise” the business model of advice.

  1. ‘Lot of wood to chop’: Hartley’s tough task of turning Insignia around

Having already spent the previous few years helping turn around AMP, Hartley was anointed to succeed Mota to lead Insignia Financial, possibly the wealth management industry’s most difficult job.

  1. Australians willing to pay $800 for retirement income advice

Cost is the main barrier to people seeking advice and the Investment Trends 2023 Financial Advice Report revealed only 3 per cent of the 1.3 million Australians wanting advice would be willing to pay more than $2000 for it. The research showed 80 per cent of Australians saw the benefit in receiving advice but were deterred by the cost.

  1. Insignia’s CEO baton pass compounds headwinds

Before Hartley was appointed CEO, Mota’s pending exit and the search for his replacement was causing concern for market analysts. There was no guarantee the successor would stick to Mota’s strategy and commitment to financial advice, and there were further concerns that his successor would not be as committed to advice advocacy as Mota had been.

  1. Negative media coverage leads to Cbus outflows

Troubled industry fund Cbus found itself in hot water on several occasions this year and escalating negative media coverage began driving member outflows. Data from Adviser Ratings-owned ProductRex found Cbus’ outflows were rivalling those of AustralianSuper, despite it being a quarter of the size.

  1. Fair Work case highlights the risk of offshoring

Outsourcing has become increasingly popular with advice firms but a Fair Work Commission ruling sent a warning that using offshore talent won’t protect practices from obligations under Australian employment law. A Philippines-based worker won an unfair dismissal case against her Australian employer, setting a precedent for practices using offshore workers.

Comments

No comments added.

Add comment

Name

Email

Comments

Enter code:*

Refresh code

Add comment

« back to media

Adviser Ratings

For consumers

For advisers

 
  Join as an Adviser
 

While we may facilitate the review and introduction of Advisers, Customers of Adviser Ratings will be responsible for entering into their own agreement with Advisers introduced through our website. Adviser Ratings does not provide personal financial advice nor do we recommend or suggest a particular adviser is right for you. We provide information of a general nature and we do not take into consideration your personal objectives, financial situation or needs. Always consider whether the advice and information you are provided suits your needs. Adviser Ratings does not endorse, accept or adopt the Advisers on our site, the content of any profiles or the comments or discussion in any community forums. For further information about How We Rate Our Advisers, click here. Per quote in our video, refer KPMG research undertaken for Financial Services Council

Adviser Ratings Pty Ltd (ABN 18 154 273 640 ) (AR 466730 ) is a Corporate Authorised Representative of IPraxis Pty Ltd (ABN 39 114 365 007) the holder of Australian Financial Services Licence No. 329337. We are a Sydney based company located at - Level 22, Tower 3, 300 Barangaroo Avenue, Sydney, NSW, 2000, Australia

© 2021 Adviser Ratings Pty LtdTerms of Use | Privacy | Contact