The Financial Advice Association Australia (FAAA) is pleased to see the government’s Delivering Better Financial Outcomes (DBFO) announcement addressed a number of concerns the body had, such as the addition of greater certainty on the provision of scoped advice, but Abood said the FAAA is “cautiously positive” as it awaits “final detail”.
“We are looking forward to seeing further detail on how these reforms will work, beyond the high level provided in today’s announcement,” the CEO said, after the Minister for Financial Services Stephen Jones made a long-awaited tranche two announcement in the late hours of Tuesday evening.
In a statement on Tuesday, Jones clarified that advice licensees will be permitted to charge a direct fee for the advice provided by the new class of adviser (NCA), but that the ability for funds to indirectly charge will likely remain the preferred option for most.
The option to charge for the advice provided by the new class of adviser was championed by groups such as the FAAA with the aim to enable a broader range of institutions to employ the new class of adviser, fostering neutrality across various advice models.
Commenting on this area of the government’s DBFO update, Abood said it is a welcome assurance that financial advice businesses, as well as product issuers, can employ this new class of adviser, and charge one-off or episodic fees.
“We certainly believe that advice firms should have this option. This provides a more level playing field, enhances competition, and gives consumers more choice in how they access simple advice,” she said.
“Quite early in discussions, many members told us they also wanted to be able to appoint these advisers. This could offer a more affordable means of providing simple advice to the children or grandchildren of clients, for example. It is pleasing that the government has recognised this and plans to legislate accordingly.”
ifa understands that in meetings held by Treasury with select groups in the lead-up to last night’s announcement, industry super funds had clashed with retail funds and advice stakeholders over the charging model for the proposed new class of adviser.
In June, Abood told ifa that the inability to charge for their services would make it almost impossible for advice firms to also employ NCAs.
No name yet for NCAs
Abood also confirmed on Tuesday evening that the name of the new class of adviser has not yet been settled and remains “an important matter of detail to be finalised”.
“Our position has been that the name should not include the restricted terms ‘financial adviser’ or ‘financial planner’,” she said.
The government had initially suggested that NCAs should be called qualified advisers, which understandably garnered an avalanche of criticism from the advice community.
Moreover, Abood said the FAAA is pleased to see that the NCA would become a pathway to becoming a qualified financial adviser.
“It’s extremely important that the education for NCAs can count towards a full financial planning degree, and that the NCAs of today can become the professional financial advisers of the future. Since the banks and other institutions exited financial advice, those traditional training grounds have been lost,” the CEO said.
“With our numbers having halved in the last five years, and only just over 300 new entrants last calendar year, we urgently need to replenish the ranks of professional advisers. We are pleased to see the government’s recognition of the importance of this.”
On the NCAs’ scoped advice restrictions, Abood said: “We are particularly keen to see how this will play out in relation to retirement advice, and how it will interact with the sole purpose test – we look forward to seeing more detail from the government on this.”
Namely, Jones clarified on Tuesday that NCAs 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,” the minister said.
ASFA welcomed update
The peak super group welcomed the government’s announcement, highlighting in particular the collaborative approach the government took.
“It was a true collaboration and testament to the broad commitment all ASFA members, associations and the government has to ensuring more Australians have access to help with their retirement,” the Association of Superannuation Funds of Australia (ASFA) CEO, Mary Delahunty, said.
Delahunty said the group is particularly pleased to see that creation of the new class of advisers is accompanied by “strong regulations and consumer protections” to ensure high standards are maintained.
“These reforms are a clear signal of the government’s commitment to delivering better outcomes for Australians by addressing barriers to affordable financial advice,” she said.
“The future for Australians’ retirement savings is brighter with a more inclusive and modernised advice framework and we look forward to seeing the legislation progress in the New Year.”
I’m cancelling my membership happy to forgo my cfp. Out of touch and working against their members so disappointing
I’ve already cancelled my membership and I’m aware of others who intend to do so, including lapsing of their CFP.
FAAA is now an irrelevant body. Colluding with Jones and the industry funds and agreeing to an NCA’ who are really only for industry funds and offered to non industry funds to deflect the arrogance of the move. Ignoring all the fees for no advice paid by Australians prior to this period and high lighters in the Hayne commission . Now endorsing fees for no service for 80%!of industry fund members. FAAA you are irrelevant and will go the way of dinosaurs. Jones this is a disgrace. Australians especially the young industry fund members get angry! If you understand what they’re doing to you and taking your money to advise others. Please fix this Libs and cross benches. It’s a disgrace
Waiting for Kenneth Hayne’s negative comment. Nope, been paid a squillion for his RC and never to be heard of again.
He’s living it up on his yearly $300,000+ judge’s pension for which taxpayers get absolutely nothing. But apparently, that’s not ‘fees for no service’.
I remember what he said about trail commissions….’The job’s done why should you still get paid for it’. Exactly the way I feel about judicial pensions. It’s only a good concept if he gets something out of it.
Has there ever been a more impotent “professional” association!
How much do members pay Abood in salary each year for the pleasure of kicking their legs out from underneath them?
I’m a CFP member and have paid thousands of dollars in membership fees to the FPA/FAAA over the years.
I fail to understand how this new class of adviser (NCA) is going to benefit me and why the FAAA supports this. If anything NCA is a negative for me/my business.
It feels like my membership fees are funding advocacy for things which are not important for me or a negative for me.
I will be cancelling my CFP membership if the FAAA cannot adequately explain this to members.
“the new class of adviser was championed by groups such as the FAAA with the aim to enable a broader range of institutions to employ the new class of adviser”
Considering most advisers are small business and/or operate in small AFSLs then how does the FAAAs’ position, benefit these advisers. It’s clear the FAAA are only about institutions. Why?
Increased revenue stream (for them).
Follow the money.
The NCA should be formally known as an IR (information representative) & should NOT contain the word Advice so as to easily identify the difference between that role and the role of a qualified Financial Adviser. That would be in the best interests of the public.
Fee’s for no service what on earth are the FAAA doing this will create such a bad outcome, they will just advise free advice say professional advisers are charging too much but they charge every member when 2% use the service crazy Royal comission 2.0 on the way
Why on earth are we not just giving relief to the existing advisers to see more clients.
New 2.0 adviser recommends partner rollover money to their fund. losses grandfathered pension… so many issues out of all this simple advice it is not funny
Crystallised cgt loss of insurance it will be a selfish shambles
The FAAA’s response to the DBFO reforms—cautiously welcoming the introduction of the new class of adviser (NCA)—continues to demonstrate a troubling lack of awareness about the broader implications for the financial advice profession. While the FAAA focuses on high-level benefits like education pathways and scoped advice certainty, it ignores the deeper structural shifts these reforms will bring, particularly the competitive advantage handed to industry super funds.
Asleep at the Wheel: Missing the Bigger Picture
The FAAA’s position, framed as cautiously optimistic, fails to account for the seismic changes these reforms represent. Industry super funds, already the most powerful entities in the sector, will now wield even greater influence, using NCAs to entrench their vertically integrated ecosystems. By focusing on education pathways and access to simple advice, the FAAA appears oblivious to the strategic advantage these funds gain through collective charging mechanisms and their ability to leverage NCAs for member retention.
The FAAA’s endorsement of the reforms as fostering a “level playing field” is particularly baffling. The reality is the opposite: industry super funds gain an overwhelming advantage by collectively charging their members for advice—whether accessed or not—while retail super funds and independent advisers cannot compete without risking regulatory scrutiny or public backlash over “fee for no service” scandals.
The NCA Trojan Horse
The FAAA’s enthusiasm for NCAs as a pathway to full adviser qualification is shortsighted. While this might sound promising on the surface, it misses the point: NCAs are not being introduced to fill the pipeline of independent financial advisers. They are a tool for industry super funds to provide scoped, in-house advice tied to their products, ensuring members remain within their ecosystem. This isn’t about broadening access to advice—it’s about creating a workforce that directly serves the interests of their employers.
Even the FAAA’s celebration of the restrictions on NCAs—preventing them from advising on SMSFs or managed investment schemes—fails to address the broader implications. These limitations only reinforce the monopoly of industry super funds over key areas of financial advice, sidelining independent advisers and retail super funds further.
Consumer and Competition Concerns Ignored
While the FAAA applauds the “consumer protections” built into the reforms, it overlooks the significant downside for consumers. Collective charging means members of industry super funds will subsidise advice they may never use. This model not only raises fairness concerns but also risks further undermining innovation in retirement products. Retail funds, unable to compete with the subsidised advice model, will struggle to innovate, leaving consumers with fewer choices and a lack of competitive pressure to drive better outcomes.
Critics like Super Consumers Australia have rightly pointed out the risks of poor-quality advice delivered under these reforms. Industry super funds already face governance issues and delays in processing member benefits. Adding NCAs into this mix, without robust oversight, risks amplifying these problems, especially as the advice will likely be generic and product-focused.
Government Collaboration with Industry Super
The FAAA also appears blind to the deeper alignment between the government and industry super funds. The so-called “collaboration” lauded by groups like ASFA is a clear indicator that the government’s priorities lie with facilitating the dominance of industry super funds. The FAAA should be questioning this alignment, not celebrating it. The DBFO reforms represent a consolidation of power, not a genuine effort to create a level playing field or better outcomes for consumers.
A Call for Leadership
The FAAA’s lack of critical analysis leaves the profession exposed at a critical juncture. By failing to challenge the structural implications of these reforms, the FAAA risks enabling a future where independent advice is further marginalised, and industry super funds hold an unassailable position. Instead of cautiously welcoming these changes, the FAAA should be sounding the alarm about the risks to competition, innovation, and consumer choice.
In short, the FAAA’s response reflects a failure to grasp the bigger picture. While it focuses on details like education pathways and the name of the NCA, it misses the real story: a sector war where industry super funds, armed with government support, are tightening their grip on Australia’s financial advice landscape. The FAAA’s role should be to defend the independence and viability of the profession—not to cheer from the sidelines as its foundations are eroded.
All valid points Peter. The facts are that unions and industry funds with power and lots of money control the rhetoric with Labor & the FAAA stands to benefit with a new class of membership so here comes the new world ready or not…!
This is good news – more advice for more Australians
Industry Funds Rejoice!
Lol very amusing. If this comment weren’t a joke then you are clearly bias towards the beneficiaries of this junk legislation or ignorant to vertical integration driving poor outcomes for consumers either way. So whether a joke or serious, the most amusing comment for sure in this discussion lol
Vertically integrated, low quality guidance, motivated by FUM retention/growth, with a decent lashing of ‘fees for no service’ and screaming conflicts of interest.
But all of this is ok in the name of access?
Good news you say?
It’s about FUM retention and achieving this via fee for no service/cross subsidisation.
What are you talking about ?