Shadow treasurer Angus Taylor and shadow minister for financial services Luke Howarth have addressed a letter to Financial Services Minister Stephen Jones, seen by ifa, to demand section 99FA be removed from the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024.
We bring you the letter in its entirety:
We are writing to you regarding the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024.
This Bill implements a number of important measures that the Coalition has been calling for some time, including the first tranche of the Quality of Advice Review and vital reforms to the location and producer offsets for the screen sector.
Businesses in the financial advice, financial services and the screen sectors are eagerly awaiting the passage of this legislation.
However, the Coalition has grave concerns with the Schedule 1 of the Bill. As drafted we believe it is likely to increase the costs of financial advice and put an undue regulatory burden on financial advisers.
As the recent Senate Economics Legislation Committee inquiry highlighted, while the government’s amendments have addressed the concerns regarding drafting errors around life insurance commissions, they have not resolved the challenges presented by Section 99FA, namely:
- That the clause adds a high level legal risk to superannuation trustees that runs counter to the policy intent of increasing access to advice;
- That the clause will alter superannuation funds’ risk appetite and willingness to allow members to deduct advice fees from their superannuation, either by reducing access to advice or increasing compliance obligations to financial advisers;
- That this may create privacy risks for individuals’ personal financial information; and
- That this provision may increase costs of receiving financial advice, and of administration of super funds.
As witnesses from ASFA, the Financial Advice Association of Australia, the Law Council of Australia and the Financial Services Council indicated to the committee there is a significant discrepancy between what the government says the intent of this clause is, and what industry say its impacts will be.
In the words of the FAAA, this clause “threatens the financial wellbeing of Australians” and “add[s] nothing but confusion, uncertainty and cost.” In the words of the Financial Services Council, this clause fails “to achieve the common policy objective of more affordable and accessible advice” and will “put an unacceptable legal burden on trustees” and “an unacceptable regulatory cost on advice businesses.”
The Coalition therefore recommends that the Government remove section 99FA in division 1 of Schedule 1 from the Bill. We will support the Bill should this change be made and work with the Government to facilitate its speedy passage through the Senate and the House.
The letter also addresses other areas of the bill, which aren’t related to financial advice.
Albanese is slipping in the polls, Jones is slipping up on just about everything.
Keep this sort of work rate up Liberals and as long as you sign off on the changes the Financial Services Industry demand from you with no excuses and that you desperately owe us, you will very likely be staring at Govt by the next election.
If you offer false or fake hope and then turn on us again like you turned your back on us for the last decade, you will be finished forever.
Your call.
A good start. Voted independent for first time ever at last election because of the diabolical mess by coalition. Still not convinced they on our side as in tit for tat over the Golden goose ie isa and fsc see super as. Here’s hoping being a professional means something.
Interesting Jones is a member of Public Sector Union, the Union that represents Treasury Staff in Canberra. Join the dots people…
Brilliant actual action instead of talk. This evidences the opposition has done MORE than Jones in one letter than Stephen has in the past 3 years. He should just quit and sit in his cushy industry fund position now right??
is this not just also talk….
IF the section is removed it will hold Stephen Jones to account and become the beginning of the end of him as a politician…
Amen.
This will change nothing. When does the incumbent government ever listen to the opposition?
It is heartening to see the shadow treasurer and financial services minister supporting financial planners. It’s a pity their predecessors didn’t do so when in office. Perhaps they have learned their lesson. I wish them success and thank them for their support.
This clause has been retained by the government in order to further raise the barriers against independent advisors. This is designed to make it far easier and more attractive to seek advice from those advisers employed by the fund than outside advisers. The funds will either refuse, delay or impose unreasonable restrictions on any advice document reviewed whereby a fee for that advice is being deducted from the fund.
However, this will not be the case when a member uses an in house adviser.
Anyone who thinks this is not the intention and end game is certifiable.
Very pleasing to see the coalition understadning of the problems that this proposal will create for advice fairness. It is now time for Minister Jones to step up as he promised voters and the industry he would do when he went to the last election with promises to reduce red tape and the cost for advisers to provide the public advice. The consumer who needs advice the most is the consumers with insufficent super and assets in the accumulation phase yet the current governement is making it more and more difficult for the providers to serve this community.
Garry it was your association who told people to vote for the peanut Labor party @ the last election & now you are asking the known liar Stephen Jones to help? He could not be less interested if he tried.
Good to see the Libs doing something positive.
I fully support the call by Angus Taylor and Luke Howarth to remove section 99FA from the DBFO bill. Section 99FA is a poisonous provision that threatens to increase the costs of financial advice and impose an undue regulatory burden on financial advisers. As highlighted during the recent Senate Economics Legislation Committee inquiry, this clause adds significant legal risk to superannuation trustees, which runs counter to the policy intent of increasing access to advice.
The concerns raised by ASFA, the Financial Advice Association of Australia, the Law Council of Australia, and the Financial Services Council are valid and pressing. They indicate that section 99FA will alter superannuation funds’ risk appetite, reduce access to advice, increase compliance obligations, and create privacy risks for individuals’ personal financial information. The provision will not only raise the costs of receiving financial advice but also complicate the administration of super funds.
The government’s amendments have not resolved these challenges, and the discrepancy between the stated intent of the clause and its actual impact is glaring. As the FAAA rightly pointed out, this clause “threatens the financial wellbeing of Australians” and “adds nothing but confusion, uncertainty, and cost.” The Financial Services Council echoed this sentiment, noting that the clause fails to achieve the objective of more affordable and accessible advice and imposes unacceptable legal and regulatory costs.
Removing section 99FA is the right thing to do. It will ensure that the bill supports its intended goals without harming the financial advice sector. This change will deliver certainty to affected sectors and help facilitate the swift passage of the bill. Let’s focus on measures that genuinely improve financial outcomes for Australians, rather than burdensome regulations that undermine them.