On Friday afternoon, 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. The consultation material can be found on the Treasury website here.
Momentum Media’s wealth portfolio is hosting a pre-election event on 10 April with key policymakers where the DBFO will be dissected in great detail. Click here to find out more.
So just to confirm CAR’s currently provide clients with SoA’s and going forward CAR’s will provide clients with CAR’s? This should be clear as mud for clients.
Collectively charging for advice is terrible — better to give advisers back their grandfathered commissions. I think it’s time for a royal commission into the government.
Why not fee-for-service when advice is actually given? makes total sense from a fairness and transparency perspective. Clients pay when they receive something of value — no trailing fees, no ongoing fees for advice they’re not actively getting.
the government already banned collectively charging why should super funds getting a free ride they will just undercut professionals and give worst advice.
Apart from a name change, I can’t see a single difference between an SOA and a CAR. The explanatory material is just waffle.
Yet another broken promise from Jones
Change of name of the document is the only real change.
At the same time Industry Super can give all manner of advice, Collectively charged / COMMISSIONS.
Jonesy could be a comedian in his next life, we’ve had 4 years of jokes from him!
Even the muppets and the clowns are embarrassed by Jones and do not want him…
A useless liar who did nothing for advisers and soon to be gonski thankfully!
Here here and shut the door on your way out Jones!
Having lunch yesterday with some stalwarts of the Life insurance industry, it saddened me to think that most of these risk specialist advisers were forced out through layer upon layer of bureaucratic nonsense, eventually exhausting them into early retirement. The industry is on its knees with more going out in claims than coming in through New Business, hence the unsustainable premium increases, which politicians are finally beginning to understand and address, sadly too late for these great advisers.
I am so far beyond the absolute self-serving pure BS of this Steven Jones creature I could vomit each time I see his name mentioned. Like a lawyer, you can tell when he’s lying as his mouth is moving. The carnage and wreckage of our industry was bad enough until he came in to make it many times worse. He should be summarily dismissed from his position but only after a parliamentary inquiry into his machinations where he should be made to explain himself and the damage he has wrought on our once great industry (I would have said profession only Jones and other clownish politicians have ensured it will never be known as such).
If you think the coalition will do any better, you’re dreaming.
The coalition did a poor job last time and was punished for it.
Labor has done a poor job this time and should be punished for it.
No one should escape punishment just because “the alternative might not necessarily be better”.
Keep on punishing whoever does a poor job, until someone starts doing a good job.
It’s Time…?
Always late on a Friday afternoon for advice.
Shows just how much care and interest they have for the advice industry.
It is what it is.. Jones is a self & industry fund serving politician, though the pretending to care part is what pisses me off the most!
Do you have a link for this ifa? As at 5.10pm Friday afternoon there’s nothing on Treasury or Stephen Jones website about it.
Someone has just realised they need our votes.
Not that they’ll get it anyway! They would need to naturalise me! 🙂
More Waffle, more lies.
So far Jones has increased Advice costs, increased the HOT MESS.
– tripled Adviser ASIC levies.
– CSLR levies introduced to be $4K each Adviser next year & and $8K each adviser the year after.
– New Fee forms that save ZERO time and costs
Now SoA changes that look like almost nothing will change.
But wait, let Industry Fund “Collectively Charge = COMMISSIONS” for ALL advice and that Advice will be provided by Uneducated, Unqualified BackPackers.
And most Industry Fund Members will be paying COMMISSIONS FOR NO SERVICE.
Jonesy and the ALP owned and run by Industry Super
My outlay is $16,000 in ASIC LEVIES & CSLR. ITS JUST A BACKDOOR DISCRIMINATORY TAX SPECIFICALLY ON RETAIL ADVISERS. JUST CRIMINAL.
You’re right. I dont see much difference in new vs old SOA.. am I missing something?
Go away Mr Jones.
Go away.
failed us miserably. You do realize half the industry can continue to work past 1/1/2026 thanks to work experience pathway. So that is something to celebrate.
Yeh but have all advisers looked at the Tax Financial Adviser extra education.
That still applies to many advisers, be it degree qualified, related degree or experienced pathway.
ALL Advisers that want to be Tax Financial Advisers have to pass specific Tax and Law courses.
might be time for break. the other guys created the mess
Jones, his legacy will be, ‘ A politician who over promised and under delivered ‘. I e. The status quo.
They did say they were going to fix the hot mess………. guess they felt they needed to show they at least tried to do something……….
What on earth are the chances that this actually comes to fruition given the election is imminent? Smells of a last ditch effort to try and buy some good will for the ALP after they realised they’ve failed us miserably.
Absolutely ZERO