Assistant Treasurer, Daniel Mulino, is keen to progress the second tranche of Delivering Better Financial Outcomes (DBFO) reforms, acknowledging it is hard for advisers to get the full picture of the legislation without both parts.
The first tranche of DBFO legislation was released in December 2023 and approved in the Senate in July 2024 followed by a second part in March 2025.
The existing second tranche covers:
- Replacing the statement of advice with a more fit-for-purpose client advice record.
- Providing clear rules on what advice topics can be collectively charged for via superannuation.
- Allowing superannuation funds to provide targeted prompts to members to drive greater engagement with superannuation at key life stages.
However, at the time of the second tranche, the financial services minister at the time Stephen Jones stated there would still be further guidance given on modernizing best interest duty and creating a new class of adviser.
These outstanding items will be consulted on and combined with the draft legislation to be released in one single package.
In conversation with Financial Services Council (FSC) chief executive, Blake Briggs, Mulino acknowledged it is difficult for the advice industry to assess the viability of this second tranche without those additional items.
“There was a tranche of draft exposure legislation put out for consideration between March and May and I’m working to get the next piece of exposure dropped as soon as practical. That’s not going to be in the next few weeks because it is a complex piece of work.
“But feedback from stakeholders say it’s very hard for them to fully digest what you might call ‘2A’ until they’ve seen the next bit to tie those elements together.
“I don’t want to delay this and I’m working on it as a real priority but I’m also conscious it is very complex.”
Meanwhile, he also discussed the controversial Compensation Scheme of Last Resort (CSLR) and agreed it needed to be reviewed following its implementation. The failure of products such as First Guardian and Shield Master Fund have seen the levy for financial advisers blow vastly beyond initial estimations, necessitating a formal review.
The latest revised levy estimate for the 2025–26 financial year is down to $67.3 million for personal financial advice and sits at a total $75.7 million overall. The CSLR added that it has notified Mulino of the need for a special levy of $47.3 million.
“I need to think about the scheme and how it needs to be reviewed and what might lead to losses,” he said.
“We do need to think about all the different components of the ecosystem that can lead to investor losses and think about it in a holistic way.
“If we’re going to deal with this in a way that is sensible and pragmatic going forward, but a way that also limits losses and limits how much is going into the CSLR, then we are going to have to think about a range of actions to improve safeguards and clarify responsibilities.”
