On Friday afternoon, outgoing Financial Services minister, Stephen Jones, delivered one of his final acts for the financial advice sector before he exits politics at the election, detailing the next stage of the long-awaited Delivering Better Financial Outcomes (DBFO) reforms.
Boasting the reforms’ aim to reshape financial advice to make it available to more Australians “without the huge price tag”, the pared back DBFO tranche two is about “cutting red tape that adds to cost without providing a benefit to consumers”.
“It will also expand access to financial advice about savings, retirement and insurance for all Australians,” the minister’s statement said.
Top of the list for the reforms is replacing the statement of advice (SOA) with a more fit-for-purpose client advice record.
The draft legislation will also provide clear rules on what advice topics can be collectively charged for via superannuation and allow super funds to provide targeted prompts to members to drive greater engagement with superannuation at key life stages.
Not included is the modernisation of the best interests duty and the introduction of a new class of advisers, however the government said it “continues to develop legislation” in these areas.
“Reforming the best interests duty and removing the safe harbour steps will provide advisers with confidence to deliver appropriately scaled advice,” Jones’ statement said.
“The new class of adviser is also vital to allowing life insurers, financial advice licensees, superannuation funds and other institutions to expand the supply of quality and affordable advice to consumers.”
According to the statement, these remaining measures will be consulted on alongside the draft legislation, with a goal of combining the two and introducing them into Parliament as a single package.
“The whole package works together to expand access to affordable, quality financial advice,” the statement said.
Explaining the reason for splitting the reforms and pushing a version of the draft legislation through ahead of the election, the minister said it would provide stakeholders “more time to review and comment on the parts of the next tranche that are ready to be reviewed”.
“It also demonstrates the government’s ongoing commitment to reform financial advice laws,” Jones said.
Consultation on the reforms will be open until 2 May, with the government saying it would invite feedback to ensure that the reforms deliver on their objectives and operate effectively across all parts of the financial advice industry.
So, billions of dollars spent; reams of legislation drafted, re-drafted or scrapped; the financial advice industry decimated; accountants and small advisors driven out of the advice space; the cost of advice increasing ten-fold…………and we end up back where we started – with unqualified bank staff and super fund call centre operators giving conflicted advice to walk-ins, and shamelessly flogging their own products.
Wasn’t it a Royal Commission that condemned those practices and set us down this pathway to hell in the first place?
Shows what happens when you have a bunch of ideology driven peanuts running the monkey farm.
If it wasn’t already clear. Labor wants affordable advice through ‘new class of advisers’ and their buddies in the unions but load up ASIC levy and AFCA charges so non union advice remains very expensive.
Mr Jones you can’t leave soon enough.
Will this new class of adviser have to pay the ASIC levy and CSLR contributions? They should, because this will be where the next Royal Commission will be based around.