Delivering Better Financial Outcomes (DBFO) is an Australian Government reform package that proposes changes to the Corporations Act to simplify financial advice regulation, including removing the safe harbour steps in section 961B(2) and reducing prescriptive requirements. Treasury and ASIC expect the reforms to shift the focus toward professional judgement and client outcomes.
Expanded Answer
Delivering Better Financial Outcomes (DBFO) is a package of legislative reforms developed by the Treasury in response to the Quality of Advice Review (QAR). The reforms are intended to simplify the regulatory framework for financial advice under the Corporations Act, particularly the personal advice obligations in Part 7.7A. A key proposal is to remove the safe harbour steps in s961B(2), while retaining the overarching Best Interests Duty in s961B(1), to reduce reliance on checklist-style compliance.
The reforms also propose changes to documentation requirements, including replacing Statements of Advice with more flexible client advice records and clarifying who can provide advice. ASIC is expected to administer the regime in a way that supports principles-based compliance, with a stronger emphasis on whether advice delivers good client outcomes rather than whether prescriptive steps were followed.
Regulatory focus is expected to shift toward the effectiveness of advice processes, professional judgement, and governance frameworks under s912A. Licensees will still be required to maintain adequate systems, supervise representatives, and ensure services are provided efficiently, honestly and fairly, but with less reliance on rigid procedural rules.
For further context, see When everything old is new again: understanding the new client advice record requirements and The future of advice in a changing regulatory environment.
Why it matters
DBFO reforms are expected to materially change how advisers demonstrate compliance, shifting regulatory risk from process failures to judgment and outcomes. Licensees that rely heavily on prescriptive frameworks may need to redesign advice and compliance systems.
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Practical guidance
- Review advice processes to ensure they demonstrate clear client outcomes, not just procedural compliance with s961B.
- Assess how documentation and record-keeping will adapt to reduced reliance on Statements of Advice.
- Strengthen governance and supervision frameworks to support principles-based decision-making under s912A.
Further reading
What does a defensible compliance framework look like for AFSL and credit licensees?