The long-awaited bill to enshrine some of the recommendations of the Quality of Advice Review (QAR) has hit Parliament.
On 14 November, the government released legislation to implement half of the Quality of Advice recommendations as part of tranche 1 of Delivering Better Financial Outcomes package. This was followed by a period of consultation, with the Minister for Financial Services, Stephen Jones, noting on several occasions that legislation would hit Parliament in the first quarter of 2024.
On 7 December 2023, the government finalised its response to the QAR, adopting a further five recommendations in full or in principle. Legislation to implement this announcement will be developed in the next tranche of the Delivering Better Financial Outcomes package.
The bill introduced to Parliament on Wednesday reads: “Tranche 1 includes amendments that will provide legal certainty for the payment of financial adviser fees from a member’s superannuation fund account and remove red tape that currently adds to the cost of financial advice with no benefit to consumers.
“This measure will support increased access to affordable financial advice for millions of Australians and will particularly benefit the five million Australians at or approaching and planning for their retirement that need assistance navigating the pension and superannuation systems.”
Among the recommendations included in this initial bill are:
- Recommendation 7 – Clarifying the legal basis for superannuation trustees paying a member’s financial advice fees from their superannuation account, and associated tax consequences.
- Recommendation 8 – Streamlining ongoing fee renewal and consent requirements, including removing the requirement to provide a fee disclosure statement.
- Recommendation 10 – Allowing more flexibility in how financial services guides are provided.
- Simplifying and clarifying the provisions governing conflicted remuneration in the Corporations Act (Part 4 of Schedule 1), including:
- Recommendations 13.1 and 13.3 – Clarifying that monetary or non-monetary benefits given by a client are not conflicted remuneration along with the removal of consequential exceptions.
- Recommendation 13.2 – Introducing a specific exception to the conflicted remuneration provisions that permits a superannuation fund trustee to pay a fee for personal advice where the member requests the trustee to pay the fee from their superannuation account.
- Recommendation 13.4 – Removing the exception to conflicted remuneration rules for the issue of financial products where advice has not been provided in the previous 12 months.
- Recommendation 13.5 – Removing the exception to conflicted remuneration rules for agents or employees of Australian ADIs.
- Recommendations 13.7 to 13.9 – Introducing new standardised consent requirements for life risk insurance, general insurance and consumer credit insurance commissions.
More to come.
I urge all financial advisers to get behind the AIOFP in its efforts to influence both Labor and Liberals to reform our compliance nightmare.
Look at what Mortgagee Brokers achieved by being united.
To achieve a pollical outcome, we must offer our influence in exchange for what we want. This is what the Banks do and at present “The Banks tell the politicians to Jump and only response is How High”: The Banks buy these outcomes with donations…..
We cannot offer the Millions in donations; however, we may be able to offer either party Government.
Our clients are voters, and we have the capacity to influence them to vote one way or the other, by using our knowledge of what influences them.
Bennelong and Kooyong are good examples of our influence at work.
What can you do to help; Join the AIOFP and send a message to Canberra that we are united and a force to be respected.
William Mills Price Financial Intelligence
Every single Industry Association now needs to stand up and state they have no confidence in this incompetent Government. Forget this “we’re disappointed” rubbish.
Recommendation 14.0- Ban the 15,000 advisers from providing advice. If these measures are how they increase access to financial advice I’d hate to see what they’d do if they wanted to decrease it..oh wait I’m seeing it first hand. month after month.
Recommendation 7 is leading to the banning of Advice fees from Super funds.
Thankfully they didnt include the recommendation number 7 “every financial adviser must give up one Kindey each time an internationally owned product provider rips off a client”.
All that hard work, after all that time… Jones, you champion you need a holiday mate! Looking forward to 2030 when this is all sorted 🙂
3020
I don’t understand all the negativity. This will save me about 40 hours per year, which is amazing. I can now complete the TMD declarations during business hours and take on one or two extra clients, covering the cost of the increased ASIC levy and CSLR. Happy days!
You should be saving 400 hours a year, not 40.
Because the big-ticket items SOA and good advice versus Best etc., seem to have been kicked down the road.
I think Stephen Jones should stop saying “remove red tape that currently adds to the cost of financial advice with no benefit to consumers” and start saying “remove red tape that currently reduces the profitability of advice with no benefit to consumers” – because that’s how it is.
Should save my clients $1.25 off their advice fees.
That’s a touch optimistic.
New ongoing fee $5000 down from $5001.25…!
Booooo