Which technical issues are front of mind for advisers?
BT’s technical team has unveiled the top five topics shaping financial adviser conversations for the March quarter.
Based on approximately 2,000 adviser queries in the three months to 31 March, the financial services firm observed an influx of advisers attempting to understand upcoming regulatory changes impacting their clients.
Bryan Ashenden, BT’s head of financial literacy and advocacy, said advisers are increasingly seeking clarity on technically complex subjects, such as aged care reforms, taxation relating to superannuation and property, alongside fee consent rules.
“In recent months, there have been a number of important developments in the legislative and regulatory space, and so we have been dealing with higher volumes of queries from advisers trying to understand recently implemented and upcoming regulatory changes,” Ashenden said.
Topping the list was incoming aged care arrangements as one of the most popular topics among advisers, while the upcoming Delivering Better Financial Outcomes (DBFO) legislation also made the ranking.
The top queries were:
- New aged care arrangements
- Proposed tax on super above $3 million
- Cost of living and personal tax
- Indexation of superannuation limits
- Confusion from DBFO measures
The aged care reforms, which are set to commence on 1 July 2025, have prompted advisers to identify the effects on their clients, such as those who are currently in residential care facilities.
“The proposed reforms are good news for many Australians, particularly those who choose to live at home as they get older, as they will enjoy access to greater government support,” noted Michael Tran, BT technical consultant.
“A common scenario for older Australians, especially those who are not advised, is they only become aware of the substantial costs of living in aged care facilities when the need arises. In some cases, major financial decisions need to be made, such as whether the family home would need to be sold, to pay for aged care fees.”
Some $5.6 billion is expected to be invested into the reform package, which the Labor government previously described as the “greatest improvement to aged care in 30 years”.
The proposed Division 296, which would see the current 15 per cent tax on superannuation balances exceeding $3 million rise to 30 per cent, was another key topic prompting a steady pipeline of questions to BT’s technical team.
While the changes are also due to commence on 1 July, legislation is yet to be formally passed to implement the measure.
“The government has confirmed its intentions to progress the legislation they took to the election. We expect the Parliament will pass the legislation in its current form, although industry is continuing to advocate for indexation of the threshold to be considered,” Ashenden said.
BT also underscored cost-of-living and personal taxation as another issue on advisers’ minds. Namely, tax cuts announced in the 2025 federal budget will take effect from 1 July 2026, a welcome reprieve for clients under financial pressure.
“While we may have to wait another 12 months, working Australians will see slightly more in their pay packet from 1 July 2026. The marginal tax rate for taxable income between $18,201 and $45,000 will drop from 16 per cent to 15 per cent and then further down to 14 per cent from 1 July 2027,” Tim Howard, technical consultant at BT, explained.
Furthermore, advisers queried BT on the indexation of superannuation limits. Earlier in January this year, confirmation was received that the general transfer balance cap and total superannuation balance threshold will index by $100,000 from $1.9 million to $2 million from 1 July 2025.
As a result, advisers are seeking assistance on whether current or future retirees can convert more of their super balance to a retirement income stream.
A final topic plaguing advisers was confusion surrounding DBFO, particularly in relation to new fee consent arrangements.
“While the new consent arrangements started on 10 January 2025, it is important to remember that any existing arrangements with an anniversary date before 10 January still need to comply with the existing rules; and this remains the case, even if the relevant consent period extended beyond 10 January,” Ashenden unpacked.
“This includes the need to provide a client with a fee disclosure statement and the fee consent renewal notice within 60 days of the anniversary date.”
With further DBFO reforms set to be released for consultation, the head of financial literacy and advocacy said he expects advisers to remain cautious around incoming changes for the foreseeable future.
AUTHOR
Jasmine Siljic
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