Senator Jane Hume has used a Senate economics legislation committee hearing on Thursday to probe Treasury over the timeline for the remaining Delivering Better Financial Outcomes (DBFO) legislation to hit Parliament, describing the reforms as having “languished”.
Based on the responses from Treasury assistant secretary, financial advice, insurance and investment Andre Moore, financial advisers shouldn’t expect clarity any time soon, despite waiting for substantial changes since Levy’s final QAR report landed with the government on 16 December 2022.
Detailing the significant delays in getting the legislation over the line, Senator Hume noted that in its response to the report in February 2023, the government said it would “develop over the second half of [2023] and early 2024 three tranches of responses”.
With the first tranche of reforms being passed in July 2024, despite being, as Hume put it, “non-controversial”, the senator blamed the inclusion of petroleum rent resource tax measures in the same bill for it having “languished for some time”.
Prior to the federal election, then financial services minister Stephen Jones released a draft for part of the remaining reforms, which Moore described as including the “super aspects of tranche two and reforms to statements of advice”.
“The two bits that weren’t included in that were reforms to the best interest duty and introduction of a new class of adviser,” the assistant secretary said.
“Those reforms that were consulted on, we’re considering the outcomes of that consultation process, and the remaining elements are under active drafting at the moment.”
He added: “The government’s also indicated, and the former assistant treasurer when he released tranche two just prior to the election, indicated that the remaining elements of those reforms are tranche two and tranche three would proceed into the Parliament together.”
While the assurance that the reforms will be considered as a whole would likely reassure advisers that had expressed concern that any consultation on tranche two would be hampered by a lack of full detail, the lack of a solid timeline will only serve to heighten uncertainty of the regulatory landscape.
Indeed, Senator Hume said the reforms have been a “long time coming for the financial advice industry”.
“They’ve been expecting responses to the Quality of Advice Review now for more than three years. We, in the meantime, have a real problem with these industries. We’re seeing financial advisers exit in droves, and the cost of advice increasing dramatically,” she said.
“Now, the point of the Quality of Advice Review was to look at not just the quality of advice, but also the accessibility and affordability of advice. There were genuine solutions that were given in 21 recommendations by Michelle Levy. Only 14, for some reason, were adopted. There were a package of recommendations. I’m not entirely sure what the hold-up is here, because the industry is telling us that this is urgent, and they have been telling us that urgent for three years.”
Responding on behalf of the government, Senator Tim Ayres put blame for the state of advice back on the Liberals, noting that “12,000 financial advisers left the sector when, when your team occupied the Treasury benches”.
“There is the first tranche of legislation that has passed, and the officials detailed what sounded to me like a pretty extensive and steady set of progress in terms of advancing these propositions,” Senator Ayres said.
“We’re gonna keep on working our way through these questions in an orderly kind of way.”
He added that DBFO is “important legislation”.
“We’re working through a careful process to make sure that they are delivered properly.”
Treasury couldn’t give two hoots about financial advice!
They are too busy navel gazing most have SMSF and think they are smarter than us.
Don’t hold your breath on anything coming out of there.
Who would trust anything Tim Ayres or the ALP says?
I’m of the view that they cannot manage their conflicts of interest with regard to certain super fund trustees and unions.
I get the feeling that they’d be happy to see financial advisers disappear completely.
Labor has completely botched this up but Jane Hume was also a complete disaster when the Libs were in
Jane Hume is the gift that just keeps on giving…!
The first part was not controversial.
Yes it was, there was a whole embedded stitch up job with regard to s99FA. (Relating to Trustees requirements to be satisfied to release advice fees from super.) Couldn’t even get the single consent form right either.
DBFO 1 was a joke
DBFO 1.5 is a joke
DBFO 2 will be a joke
C’mon…. Seriously.
Just hurry up and remove the need to do an SoA. It’s such a quick win. Nobody likes them. Nobody reads them. They don’t change the strategy at all. They don’t improve client outcomes. All they do is add a whole heap of time and cost to the advice process
Hot Mess Jones gave us CSLR that is the single most destructive Adviser legislation ever.
Hot Mess Joneses Quick Wins via BDFO1 increased Red Tape, with Life Insurance Commissions Optins required. Plus 8 mths of redoing Fee Consents for new accounts and ongoing basket case process of Fee consent for new accounts.
Preceded by 9 years of Adviser persecution from Frydenberg, ODwyer & Hume. FARSEA, LIF, etc
It’s hard to imagine it can be any more useless and destructive from Canberra to Advisers.
It is inappropriate for Senator Jane Hume to make such commentary given her significant and documented role in the demise of the profession of financial planning. A significant number of the QAR recommendations do nothing to improve the accessibility and affordability of quality financial advice. Her failure as the Coalition Financial Services Minister is characterized by adoption of all 76 Recommendations from the Hayne Royal Commission (many being incorrect and impractical), increased compliance costs (Annual Fee Consent Forms and Annual Opt-In) and her role as architect of the Compensation Scheme of Last Resort (CSLR). Her legacy in the CSLR may well be evidenced by many professional planners exiting the profession as a consequence of increasing levies, on advisers who are unrelated parties to non-payment of AFCA Determinations.
The Liberal Coalition ignores the irony of her continued role in critically commenting on the failure of public policy in the financial services portfolio over which she alone had ministerial responsibility. It would not be an unfair assessment to conclude that Senator Hume has very limited credibility.
This fully illustrates the uselessness of Politicians. They are paid to do a job, but if their performance is ever applied to any reasonable metrics, they always come up short. The “too hard” basket must be a huge receptacle!
Add the uselessness of the Red Tape maniac Bureaucrats too.
20 years of Canberra Failures for Advisers.