The passage of the first Delivering Better Financial Outcomes (DBFO) bill has garnered widespread positive reactions, with the Financial Advice Association Australia (FAAA) claiming victory and the superannuation sector welcoming the added certainty.
The bill sailed through Parliament on Thursday, after Minister for Financial Services Stephen Jones moved amendments to the controversial section 99FA.
“The FAAA, along with many other organisations, has been advocating for some time for this outcome, and we are pleased that the minister has heard our concerns and acted,” the association’s CEO, Sarah Abood, said.
“The proposed changes to the wording of section 99FA are a positive step. It confirms that there is no intent to change the existing practice of superannuation funds when checking that financial advice fees are being paid in accordance with the Sole Purpose Test. This should reassure superannuation funds that their existing risk-based approach can continue, minimising additional documentation requests to advisers,” the CEO noted.
Keith Cullen, managing director of WT Financial, praised the passage of DBFO as “a huge win for common sense”. He extended congratulations to the advice community, clients, and the super funds and associations for effectively advocating their positions in a collaborative and dedicated manner.
“And congratulations to the minister for having the pragmatism and courage to make the amendments despite what the Senate committee report concluded.”
The Australian Retirement Trust (ART), the second-largest superannuation fund in the country, welcomed the passing of the legislation despite earlier controversies that led to a clash between the Super Members Council (SMC) and the Association of Superannuation Funds of Australia (ASFA), both of which ART is a member.
Although the fund did not directly address the amendments made at the 11th hour on Thursday, it stated that it already has “embedded robust internal processes” in place to prevent consumer harm and balance erosion in the process of providing advice.
These processes, ART’s head of advice said, are in keeping with the “legislative requirements that must be met for a trustee to charge the cost of advice to a member”.
Anne Fuchs added: “As a fund, we are dedicated to partnering with our members and the advice community to ensure qualified advice is provided in a manner that is ethical, accessible, and affordable.
“Australian Retirement Trust deeply values the strong working relationship we have with our external adviser partners who support our members to make good decisions to maximise their hard-earned savings.”
ASFA issued a statement before the bill passed the Senate, applauding Jones’ amendments as responsive to sector voices.
“This reflects the minister’s commitment to listen to the sector and to work constructively on a solution,” Mary Delahunty said.
“Removing barriers to change is welcomed by the sector, and we look forward to working constructively with the government on the next tranche of changes.”
The SMC has yet to react publicly to the passing of the DBFO.
Among those applauding its passage, AMP praised the government for collaborating to effect change that enhances clarity for superannuation trustees and advisers, promoting more affordable financial advice.
Namely, its advice lead Matt Lawler said the amendments made to section 99FA reflect the objectives of the Quality of Advice Review, with the ultimate beneficiaries being the growing number of Australians requiring financial advice.
“We look forward to continuing to work with government and industry as we implement phase 1 of DBFO and as we look ahead to phase 2,” Lawler said.
According to the DBFO bill, amendments made to section 99FA will come into effect the day after the act receives royal assent, along with the provisions aimed at reducing red tape on advisers.
