DBFO nowhere to be seen as Treasury updates regulatory grid

Announcing the release of the second edition of the Regulatory Initiatives Grid (RIG) on Friday, Financial Services Minister Daniel Mulino touted the importance of the initiative, saying that it “maps out upcoming reforms and regulatory activities”.

Closing in on two years since former minister Stephen Jones announced the Delivering Better Financial Outcomes (DBFO) reforms stemming from the Quality of Advice Review, the timeline for the second tranche of the regulation remains unclear.

The government released the first edition of the RIG in December last year, with the tool listing announced and publicised reform priorities and initiatives that will materially affect the financial sector over the next two years.

While the second tranche of DBFO was included in the first edition of the RIG, all of the legislative changes that would impact financial advice have failed to receive an update in the latest edition.

In the description for the advice reform package, the RIG simply noted that the public consultation on exposure draft legislation for three of the five measures in tranche two has concluded, with “further consultation on remaining measures to be undertaken in due course”.

The timeline, however, is empty.

In July, Minister Mulino told a Financial Services Council (FSC) event that he didn’t want to delay the DBFO legislation.

“I’m looking to work on this as a real priority, and this is one of my top two or three priorities at the moment, but I’m also conscious that it is complex,” he said.

“I’m conscious that there are a wide range of views and I totally acknowledge and thank all the various players for trying to find the maximum overlap, the maximum area of consensus possible.

“But I’m also conscious of the detail matters in an area like this. I want to get this right, but the next step will be to put out the disclosure legislation on what you might call 2B, so that people can then fully digest all those elements deeply.”

Earlier this month, Treasury officials also cast doubt on a speedy release of draft legislation.

Speaking at a Senate economics legislation committee hearing, assistant secretary, financial advice, insurance and investment Andre Moore said Treasury is considering the outcomes of the consultation over the “super aspects of tranche two and reforms to statements of advice”.

“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.”

The broadly welcomed proposal to improve the pathways for financial advisers to enter the profession also received no update, with the RIG simply outlining the goal of the proposed measures and saying the “timing of next steps will be announced in due course”.

In February, Jones announced that the government would reform the current education pathway for advisers, which he said is “not sustainable”.

“The Albanese government is rebuilding a strong and sustainable financial advice industry that ensures Australians can access high quality and affordable financial advice,” then-minister Jones said.

“The advice industry was abandoned and decimated by the former Coalition government, as the number of advisers fell from 28,000 in January 2019 to less than 16,000.

“The government will reform the education requirements for professional financial advisers to create a sustainable pathway for new advisers to enter the profession.”

Also at the FSC event in July, Mulino said Australians need the financial advice “pipeline to be healthy”.

“The reduction in the number of advisers over recent years … is a matter of concern to me, because we know that at the same time that that’s happened, the number of Australians at retirement has increased, and that’s going to continue,” the minister said, adding that he wants to “talk to the adviser community about how we can deal with that”.