Speaking at a Financial Advice Association Australia (FAAA) roadshow in Sydney last week, FAAA general manager policy, advocacy and standards Phil Anderson said the outcome of the first tranche of Delivering Better Financial Outcomes (DBFO) reforms has been underwhelming.
“I’ll be really open with you and say we’re not happy with where it’s landed. It hasn’t delivered what we wanted, and there’s a lot more work that needs to be done,” Anderson said.
“The minister having the power to mandate a single form, that has not happened, and it will not happen before the election. The opportunity to have that outcome really didn’t eventuate. Treasury didn’t prioritise the work to get broad consensus on a single form.”
The passage of the first DBFO bill garnered widespread positive reactions in July last year, largely surrounding the change of course on the requirements for super funds checking advice; however, there has been minimal progress on nailing down a mandated fee consent form.
Schedule 1, Part 2 of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 removes the requirement to provide a fee disclosure statement, introduces flexibility in anniversary date timing for OFAs, amends the mandatory content for ongoing fee consents and replaces ASIC’s ability to prescribe this content with ministerial ability.
Broadly, as Treasury explained in a letter to industry stakeholders, this means the minister has the power to approve a form for “giving consent to enter into or renew an ongoing fee arrangement or authorise the deduction of ongoing fees”.
Treasury kicked off consultation on the design of consent forms in October 2024, almost four months after the bill passed, stressing that in order for the government to approve a form, there needs to be a “broad consensus from stakeholders” and it must be “clear that efficiency benefits will be achieved”.
Missing the deadline
Given the new rules under the act came into force from 10 January – a deadline that has long since passed – product providers needed to move forward with a solution that they could use for their businesses.
According to Anderson, when it comes to dealing with advisers that work with their products, there’s a “complication”.
“There are different obligations depending upon whether you’re an adviser, whether you’re a product provider, whether you’re a super fund,” he said.
“The product provider forms, in large part, almost entirely, do not meet the adviser’s obligations, and thus we don’t have a practical way to move forward at this point. The reality of what we’re dealing with is the fact that advisers will need to have their own forms, or their licensee’s forms, and they’re also going to need to complete the product provider forms.”
Anderson acknowledged that there is a lot of work that is being done to get a better outcome on the fee consent form, however, getting it across the line “remains a priority” for the FAAA.
In December, ifa reported that the Association of Superannuation Funds of Australia (ASFA) had raised concerns about the specifics of a standardised fee consent form receiving “broad consensus”, which Treasury had previously explained was required for any form to receive ministerial approval.
“From the outset, ASFA wishes to state as clearly as we can that our members do not believe the two necessary preconditions outlined by Treasury above have been met,” ASFA said in a submission to the consultation on the forms.
“That is – we do not believe there is broad consensus for the approval of such a form, neither do we believe it is clear efficiency benefits will be achieved.”
Responding to ASFA’s concerns at the time, FAAA CEO Sarah Abood said the association “remains focused” on getting a standardised advice fee consent form over the line.
While ASFA was extremely clear that it “does not support the issuing of a standardised form at this time”, Abood said that the current state of affairs with each product provider having its own requirements “has made it a very inefficient and frustrating process for both advice businesses and consumers”.
“We, along with other members of the Joint Associations Working Group (JAWG), have provided feedback to Treasury to assist in the design of a standard mandatory form on which all product providers, including superannuation funds, will be entitled to rely,” she said.
“Standardisation of advice fee consent has been universally supported by our members and the licensees and businesses that support them.”
Amazing how quickly Treasury can act when they want to 1) reducing Allocated Pension Minimum drawdowns during Covid – at the very same time Governments were pumping money into the economy to keep it going – the logic?
How is it the FAAA continues to support the QAR and this Government? As a member ( and I soon won’t be) time to formulate your own vision…and that’s a vision written with the needs of Financial Planners and Australians first and Super funds with links to the CFMEU second.
Has the CFMEU infiltrated the FAAA….ha ha just joking.
Treasury – is it serving the Australian people or running agendas?
Another Canberra joke.
ALP out.
It’s Time
The only thing Canberra manufactures is more and more useless Red Tape.
And when they say they will cut Red Tape it ends up with more Red Tape.
Canberra’s only KPI = More Red Tape
As a practice we must send out 100’s of Fee Consent forms a year which must be sent and returned within designated timeframes. Treasury and the Minister needed to prepare and approve one Standard Consent Form before January 10 and failed. Do they need to lodge a Breach Report to ASIC?
I suspect they need a DOGE? It should be hard for anyone in Treasury working on this form to justify how their continued employment is of any benefit to Australian Taxpayers – but I suspect this is normal practice?
No, that’ll cost $4,000 which we’ll pay for.
Treasury has become the enemy of the people. Time to drain the swamp.
LIF was supposed to see a reduction in compliance to make writing risk easier with this being one of the reasons for the reduction in upfront commissions. This stopped being a concern before the ink was dry on the report. Anyone who expected product providers and regulators to work together to make life easier for advisers and clients was living in a dream world that doesn’t exist. The one form to rule them all was never going to happen.
Seriously – This is twilight zone stuff.
Pathetic.
More of the same old thing we’ve been getting for years. The sooner we all accept that the industry is dead the better.
Treasury are morons with an anti adviser bias who didn’t “prioritise” anything to help advisers. In fact they have made it the most expensive environment to ever practise. Globally. Disgusting liars.
Truthful you are.