The new Financial Services and Superannuation Minister and Assistant Treasurer fronted a room at Sydney’s Four Seasons Hotel on 29 October, swollen with industry and political bigwigs heavy with anticipation of what he would say.
Many predicted he would dance around the issues, gesticulate wildly and beat his chest for the Gillard cause.
Others remained hopeful Shorten would impress with vocal certainty his views on where his leadership would take the government’s proposed Future of Financial Advice (FOFA) reforms and in turn the industry.
He began well, declaring his intention to further mould the industry through change in the best interests of its participants. He stated he would continue consulting the industry and those seated in the room had an important role in effecting positive change.
His message was loud and clear, though its focus remained fixed on one topic – increasing Australia’s superannuation guarantee from 9 per cent to 12 per cent.
“Think whatever you like about the government, but if you think this government has a good idea on this, then we do need to build a consensus – that’s my urgent advice,” he said.
“I’m optimistic about the validity of our debate, I’m optimistic about the unbeatable logic of the idea. But what good ideas require is advocacy, not from the few, not from the many – they require support from the many to talk to other people.”
He said he understood the industry was locked in a series of debates involving accountants, financial planners, tax agents and self-managed superannuation funds, likening them to “Monty Python-like factions”.
“There are legitimate debates and there is legitimate competition, but some ideas just require everyone to just get on board,” he said.
There is no doubt Shorten’s words gave comfort and food for thought to many, however, others would have surely wished for wider scope.
Perhaps the minister was unable to comment on other FOFA reforms because of the recommencement of industry consultation?
It was unclear why no mention was made of issues of opt-in or volume rebates, particularly when product providers and fund managers made up the bulk of those in the room.
While Shorten was handed his new portfolio less than two months ago, many sections of the industry have been champing at the bit over his take on FOFA.
It is the belief of a number of industry participants that the consultation over proposed reforms has been slow, with little progress made.
The lack of understanding by those within Treasury is still a concern for many, with the independent small end of the advice market particularly concerned that their professional life is about to come to an end, with joining a large institution their only choice.
However, others in the industry have praised Shorten for his listening skills and ability to grasp industry concerns in such a short space of time.
It appears patience is required now more than ever, for what option does the industry have other than to wait for the end of industry consultation?
