In a statement on Tuesday night, Financial Services Minister Stephen Jones unveiled further details of the government’s second tranche of the Delivering Better Financial Outcomes package, emphasising its aim to meet Australians’ needs by expanding access to high-quality, safe, and affordable financial advice.
According to the statement, licensees will be permitted to charge a direct fee for the advice provided by the new class of adviser.
This enables advice businesses, alongside super funds, banks, and insurance companies, to employ these advisers and offer their services for a fee. However, strict limitations will be imposed on the scope of advice these operatives can provide.
The minister noted that while the government anticipates some licensees will choose to indirectly charge for the new advice offering, they would now have the option to charge a direct fee.
The minister also clarified that the new class of adviser will be restricted to providing advice on products issued by “prudentially regulated entities”.
“They will be prevented from providing advice on more complex topics, such as establishing a self-managed superannuation fund or advising on a managed investment scheme, through a blacklist to be prescribed in regulations,” Minister Jones said.
This, he added, would allow these advisers to focus on simple topics that most Australians would benefit from more information on, while also ensuring that there is a clear boundary between the new class of adviser and professional financial advisers.
“It is the government’s vision that the new class of adviser serves as one entry-point to rebuild the financial advice profession, and the government remains committed to reforming the broader education pathways for financial advisers,” Minister Jones said.
The option to charge for the advice provided by the new class of adviser was championed by groups such as the Financial Advice Association Australia (FAAA) with the aim to enable a broader range of institutions to employ the new class of adviser, fostering neutrality across various advice models.
The minister also clarified that the new class of adviser will be prohibited from charging ongoing fees or receiving commissions and will be held to the modernised best interests duty, aligning with the standards set for professional financial advisers.
“Anti-hawking restrictions will continue to apply, and the new class of adviser will be limited to customer-initiated engagement for new customers, ensuring they cannot be used to cold-call customers or offer unsolicited advice,” the minister said.
Licensees will also face additional monitoring and supervision obligations, backed by civil penalties, to ensure advisers operate strictly within their expertise and authorisation while adhering to the best interests duty and other requirements.
Overall the next tranche will:
• Create a new class of adviser to provide safe and simple advice to more Australians, such as choosing an insurance policy or basic questions about retirement.
• Modernise the best interests duty by providing legal clarity that will allow advice on single or limited scope issues if this meets the client’s needs.
• Remove the safe harbour steps so advisers can focus on their client’s needs – though well-intentioned, the safe harbour steps have become interpreted to mean financial advice must always be comprehensive, even if that is not in the client’s interests.
• Reform statements of advice so they help consumers make informed decisions.
• Clarify the rules on what advice topics can be paid for through superannuation.
• Allow superannuation funds to provide helpful ‘nudges’ to drive greater member engagement at key life stages.
Ultimately, the minister said: “These steps will provide greater choice and support to the millions of Australians seeking financial advice throughout their lives, while maintaining important safeguards.
“The government is developing exposure draft legislation for public consultation based on these announced parameters.”
It is not immediately clear when the draft legislation will be released.
Maybe Stephen Jones was busy doing something else over the past 15 years, but I can remind him..
We used to have this type of “advisers” in super funds and banks-it didn’t work well-clients were unhappy so, we initiated a Royal commission back in 2019. The findings led to significant reforms.
He can now access the summary of those reports, thanks to chat GPT. Which will tell him that we stopped that model. We required all advisers to complete a relevant postgraduate degree in financial planning and pass a national exam.
More than half of them left the industry, and tragically, some even took their own lives. But it had to be done as a pathway towards Australian Professional Standards.
But now he is directing this pathway towards a sales role once again.
Hon Stephen Jones MP, READ THE HISTORY
ACCOUNTANTS IN PUBLIC PRACTICE SHOULD BE ABLE TO GIVE ADVICE , ONE BENEFIT WOULD BE CONSIDERING THE TAX IMPLICATIONS
They can, if they complete the appropriate qualifications, do the applicable CPD, pay the applicable PI premiums and get licensed… until then comments like this just illustrate how little most accountants actually understand advice and the need to consider all the implications, not just tax.
what exactly are the appropriate qualifications ?
Accountants should try and get their tax advice right before looking at broader financial advice..
The ACCC should investigate Jones for misleading and deceptive conduct for all those empty promises in opposition.
So does this mean if I provide advice to a client who has an industry fund then I can invoice the industry fund for the cost of the advice?
Yes…
Looking forward to these changes! Will be good to have advisers out there that can finally help all those Australians that professional advisers turn their noses up to and expect them to fork out over $5k for an SOA
Are you sure champ?
Pretty sure the word ‘advisers’ won’t be being used to describe the NCA’s.
This makes me think that you didn’t read the article well, or are just here to incite.
Ah yes. $5,000 for professional advice ( or SoA as you describe) but the often significant initial and annual benefits of the advice, both monetary & mental health are conveniently ignored. Sadly, most critics are completely ignorant (and prefer to remain that way it appears) of what professional financial advisers actually do for clients.
You do understand that advisors are legally required to leave their clients in a better financial position than when they approched the advisor? Therefore you will make more than $5K if it is a super or investment SOA.
I charge more than $5K (not a lot more, mainly to to the additional cost of red tape) but always demonstrate to the client that they will make a minimum of 10x that in tax savings and growth in their super or investments over say a 5 year period, without taking silly risks.
Further to that all of the cost inside super is tax deductable to the fund and part of the cost outside of super is tax deductible to the client.
Looks like l will be working for a superfund in a few years time. Or specialise in areas of aged care, HNW space.
RIP professionally qualified advisers. Now even your licensee can go above you and provide advice with their own unqualified advice!
– Advice practices cannot hire unqualified advisers, but the licensee can.
– Most small self-licensed advisers won’t be able to afford hiring unqualified advisers as they won’t have the volume of new business to cover costs. It’s purely designed for big funds/distribution/marketing machines.
Three things that are wrong with this:
1. These are not a new class of adviser. It is a cool name for a salesperson.
2. This further entrenches what everyone knows is wrong with the industry, which is the alignment of product and advice. Proper advice is about much more than selling a product.
3. Financial advice can seem simple, but often it’s not. There is rarely advice that doesn’t bring up another question. Will these new advisers recommend they shouldn’t put money into super if the client is also trying to buy a home or wanting to take a gap year?
The lawyers will be licking there lips with the prospect of a 2035 royal commission into advice provided by unqualified salespeople.
nail in head, 1. These are not a new class of adviser. It is a cool name for a salesperson.
I doubt there is any adviser to give advices that their fund product is not suitable for a client who seeking advice.
The Labor Party will NEVER upset their masters.
The Trade Unions & Industry Super completely rule every single decision they make of any proposal in regard to Financial Services legislation.
They will NEVER put at risk the cash flow that these provide to their comrades for the purpose of retention & manipulation of power.
It is the paramount example of conflict of interest & always will be.
Correct comrade, the rest is window dressing for the Union run Industry funds.
Why was the release so late at night on a Tuesday? Not cool.
– The name of these ‘new advisers’ should be restricted to ‘product support providers’.
– The prohibited areas of scope for the NCA’s needs to be much tighter than no SMSF and MIS.
My concern is Jones will be trying to balance consumer access against complexity, which means there’ll be a tilt to try and describe a lot of financial advice scope as simple.
If the allowed scope is left broad, this will be an utter disgrace of an outcome for all of us who are professional advisers.
No doubt this battle will rage on in 2025.
Being a professional financial adviser in Australia really sucks. You aren’t treated as you are a member of a profession except when it comes to punishment.
I don’t know any other profession in any Western society that puts up with the absolute crap from legislators and regulators that we do.
What a joke. Imagine if this sort of stunt was tried in the Medical or Legal professions. The most blatant bias I have ever seen in 34 years. Borderline corruption.
This announcement is shrouded in layers of spin and so-called “compromises” for the advice profession. At its core, this is a blatant funds retention strategy by industry super funds, dressed up as consumer-friendly reform.
The game plan is clear: enable these funds to employ less-qualified advisers under the guise of “accessibility” and offer their services “free” through collective charging. These advisers will “guide” members towards in-house pension products, effectively locking their retirement savings into the industry fund ecosystem for life. The aim? To ensure money stays trapped under their control indefinitely.
The QAR review, and Michelle Levy’s recommendations, appear to have been co-opted—wittingly or otherwise—into this strategy. It’s hard to argue otherwise when the retail super sector is effectively shut out of competing for these funds. Industry super already dominates media and marketing with endless campaigns. Have you noticed their ads are everywhere? Now, they’ll weaponise “nudges” and push a new narrative: “Call for a free consultation with one of our advisers.” The result will be a marketing juggernaut backed by implicit government endorsement.
Make no mistake: this is a sector war. On one side, you have industry super funds with government backing and their vertically integrated behemoth in the making. On the other, the independent financial advice profession and retail super sector struggling to compete on a skewed playing field.
Minister Jones seems entirely captured by industry super interests, positioning himself as a facilitator for their ambitions. Let’s see if this proposal gets the pushback it deserves—or if the government continues down this path of enabling monopolistic practices disguised as consumer benefit.
Peter, 100% nailed it…. sadly, your comment is only visible to the converted. We’re all sick of these politicians. Josh was just as useless, remember?
Spot on!
Amen.
I don’t disagree that it makes it easier for super funds and more difficult for independent advisers, but why is the retail super sector shut out from competing against the Industry funds?
Where else should millions of Australians get advice on retirement if not their super fund? I don’t see many advisers putting their hand up to help clients with $200k, $300k in the account. And who cares if the money stays in the super system, it is working well for the majority. Take a chill pill for gods sake.
Eherm. You forgot to acknowledge that, while somewhat accurate, this was largely because the legislative framework rendered these clients commercially unviable in many respects… all until industry super decided the game had to be changed so they can profitably service these clients with other members’ money (it would seem).
Because it is UNVIABLE at those numbers.
Correct!
Vote them out!
Surely aside from all the other dumb rules here around these new advisers, everyone can see that at the heart of it, by saying they are “limited to customer-initiated engagement for new customers” that they are just playing into the hands of the banks and super funds. While they will not restrict our business from hiring someone, if we have to wait for the phone to ring for that person to be able to assist a client, we all know the phones are calling to those funds and they will start to direct clients back into their own products and we end up back where we were before. It’s hard to believe we could ever end up back here and still think we are being a profession 🙁
Thoughts and predictions:
1. Nothing will happen before the next election – not enough time remaining.
2. There will be two sets of rules for two sets of “advisers”. (Read – no level playing field).
3. “Helpful nudges” – After everything this industry has been through, this is an abject disgrace.
Yet another press release. Just get it done!
Don’t get it done. Its corrupt bias undermining of the Advice profession from a conflicted selfish government who don’t care Australian Consumers will wear the brunt of this stupidity.
Policy by media as an election stunt.
Await real details via Legislation.
No Life Insurance Commissions is moronic.
But Industry Super Hidden Commissions all good.
The Hypocrisy is strong.
Sounds like piecemealed and carved-out rot that consumers will not be able to differ from actual Professional Financial Advice. Unless their new naming convention is SALES AGENT PRODUCT FLOGGERS WHO GET PAID TO SERVICE THE PRODUCTS BEST INTEREST – then the whole thing is a travesty and deplorable. People committed suicide through the fallout of the RC Fasea and Garbage thrown at our profession the last 7 years. DISGUSTING drivel from a conflicted, under-educated rube. VOTE THEM OUT@!!!
I do not feel that this will happen or get through the parliament. Do not hold your breath on this one.
“As long as they can sell Industry Super funds for their overlords all else will be forbidden”
Nothing new, still no word on when the draft laws will be released
Hopefully never. And based on the tranche 1, an unequalled amount of drafting errors with a complete misunderstanding of the current state or legal framework of the profession. How do these Treasury Boffins and Politicians who not only refused feedback but suppressed it, sleep at night?