Spender criticises Labor's 'lack of urgency' on advice reforms

Ahead of the federal election on May 3, independent member for Wentworth Allegra Spender criticised the government for its lack of action on urgent advice reforms.

Speaking at the Financial Advice Association Australia's (FAAA) federal election financial services summit, Spender said while minister for financial services Stephen Jones has worked to deliver some reform, she wished there had been more movement.

"I've made my commitment in this space to create a sustainable and fair Compensation Scheme of Last Resort (CSLR), because I think that is really important," she said.

"We have already been engaging with the Assistant Treasurer on this issue. [The CSLR] is there for a good reason; to compensate losses incurred by clients of poor financial advice.

"However, this is the textbook case of moral hazard that has ballooning costs and disproportionately affects small and independent firms."

Spender said she has been engaging with Jones around concerns with the CSLR since June last year.

"I'll be honest, I'm really disappointed that they haven't actually moved further. I do acknowledge that the Labor government has initiated the review, but there's a lack of urgency on this, and a lack of urgency in terms of backing up legislation, backing up their words. So that is, is something I continue to fight for," she said.

Spender added that ensuring Australians have access to affordable financial advice is an urgent issue.

"The current financial uncertainty that we're seeing at the moment is affecting [everyone from] the curious young investors to retirees," she noted.

"So, for me this is really about, how do we get really good and affordable financial advice for all Australians? And what disturbs me in some of the conversations I've had with financial advisers, particularly in Wentworth, is that it's only the fairly wealthy who can afford it. That seems like the complete opposite of what we should be doing."

Spender said it needs to be a priority for the government to fix the issues to allow those who need advice the most to access it.

Spender added while she believes the legislation in its current form came from a desire to protect people, it has actually led to most people being locked out from receiving advice they desperately need.

She highlighted that the drastic decline in adviser numbers has also impacted Australians who need financial advice.

"That is going to be a fundamental issue that we have to address. I acknowledge the need for us to fix this urgently," she said.

"In this last term of parliament, I beat a fairly well-worn path to the Assistant Treasurer's door to talk about the issues related to financial advice and tax reform, because these are issues that matter to me."