Draft legislation for the first part of the Delivering Better Financial Outcomes reforms is open for consultation.
The information can be accessed here.
This package aims to legally solidify the payment of adviser fees from superannuation funds and reduce unnecessary regulatory burdens that increase advice costs without benefiting consumers.
Key aspects of the draft legislation include:
- Legal Clarity for Adviser Fees: Aligning with Recommendation 7, it clarifies the legality of superannuation trustees reimbursing member’s financial advice fees and the related tax implications.
- Streamlining Fee Processes: Recommendation 8 focuses on simplifying ongoing fee renewal, consent requirements, and eliminating the need for a fee disclosure statement.
- Flexibility in Financial Services Guide (FSG) Requirements: Recommendation 10 allows more adaptable approaches to meeting FSG obligations.
- Reforming Conflicted Remuneration Rules:
- Recommendations 13.1 and 13.3 specify that benefits given by a client are not considered conflicted remuneration, removing related exceptions.
- Recommendation 13.4 eliminates exceptions to conflicted remuneration rules for financial product issues not advised in the past year.
- Recommendation 13.5 removes exceptions for agents or employees of Australian Authorised Deposit-Taking Institutions.
- Recommendation 13.2 introduces an exception allowing superannuation trustees to pay advice fees from member accounts upon request.
The legislation also proposes standardized consent requirements for life risk, general, and consumer credit insurance commissions (Recommendations 13.7 to 13.9).
Responses to this consultation will be accepted until 06 December 2023.
If you wish to discuss what this action might mean for you, reach out to us.