The Financial Services Council (FSC) believes the financial advice reforms tabled in Parliament “risks missing an opportunity” to make improvements around regulatory duplication.
The government introduced the first tranche of its Delivering Better Financial Outcomes reforms in Parliament on 27 March which will enshrine recommendations made in the Quality of Advice Review.
This includes details about “reducing red tape” around streamlining fee consent requirements, ongoing fee arrangements, conflicted remuneration and flexibility for financial service guides requirements.
It also includes information on how superannuation funds will be able to charge for financial advice.
“Tranche 1 includes amendments that will provide legal certainty for the payment of financial adviser fees from a member’s superannuation fund account and remove red tape that currently adds to the cost of financial advice with no benefit to consumers.
“This measure will support increased access to affordable financial advice for millions of Australians and will particularly benefit the 5 million Australians at or approaching and planning for their retirement that need assistance navigating the pension and superannuation systems.”
In response, Blake Briggs, chief executive of the FSC, welcomed the measures but said there are areas that still need work.
“Industry encourages the Assistant Treasurer to make the most of the opportunity to remove onerous duplication and red tape that has contributed to advice becoming unaffordable for millions of Australian consumers.
“We support the government’s aim of ensuring more Australians can access financial advice through their superannuation, but despite the many positives in the bill we are concerned that it will entrench unnecessary obligations on superannuation trustees that would be costly to maintain and act against the delivery of affordable financial advice.
“The FSC encourages the government to continue to consult through parliamentary processes to address industry’s concerns and to ensure financial advice is more affordable for Australian consumers.”
The explanatory memorandum for the legislation states superannuation trustees should be able to pay a fee from a member’s superannuation account to an adviser for personal advice provided about their interest in the fund.
This will provide superannuation trustees with more certainty about paying advice fees agreed between a member and their adviser from the member’s super account, and ensure adviser fees are not paid in breach of the Superannuation Industry (Supervision) Act and are not taxable benefits for members.
