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Delivering Better Financial Outcomes
Your hub for the latest updates and member guidance on the DBFO reforms.
Background
Following 10 months of consultation, independent reviewer, Michelle Levy, handed the Quality of Advice Review (QAR) final report to government on 16 December 2022. The government responded to 14 of the 22 recommendations made in the QAR report, consulting on a draft roadmap for implementation in June 2023.
With a focus on improving access to financial advice, the ‘Delivering Better Financial Outcomes’ package of reforms implements the government’s final QAR roadmap in two tranches.
Tranche 2
On 21 March 2025, the government released draft legislation containing the first components of tranche 2 of the DBFO reforms. The draft legislation included:
- rationalisation of the Statement of Advice (SOA) requirements
- clear rules for collective charging of advice for super funds
- allow superannuation funds to provide targeted prompts to members
The government has also restated its commitment to developing legislation on the following outstanding components of the Tranche 2 reforms:
- modernisation of the Best Interests Duty
- removal of the best interest duty ‘safe harbour’
- new class of adviser
Tranche 1
Fee consent implementation update
It is important to ensure that you fully comply with the client consent obligations for advisers in section 962G(2) of the Corporations Act. Failure to do so will result in the automatic termination of your ongoing fee arrangement.
Take care when using product provider forms to ensure that all the information advisers must include in the client consent form is included.
Advisers may need to continue to use one form for their own obligations and another to meet the requirements of the product providers.
Technically under the law, 10 January is the ‘commencement’ of the ‘transition arrangements’ for these reforms. The transition arrangements mean that the changes commence at different times for each client based on the anniversary when the OFA was entered into with that client. What this means is that when you renew an OFA with a client on or after 10 January:
- You are not required to provide an FDS
- You must meet the new client consent obligations
- You have 150 days from the date of the anniversary of the OFA to obtain your client’s consent to renew your OFA and deduct fees from an account. After this period, if consent has not been provided, your OFA will terminate.
Please note that while you no longer have to provide an FDS, the information required in the new consent form includes the ‘look forward’ information (previously required in your FDS) about the services your client is entitled to receive in the coming 12 months.
Access the FAAA’s client consent guidance. ASIC guidance on the new client consent obligations will also be helpful:
Tranche 1 implementation
DBFO Tranche 1 includes the following changes which commenced at different times.
- removal of the Fee Disclosure Statement (FDS) obligations (transition arrangements commenced from 10 January 2025)
- streamlined and consolidated client consents for ongoing fee arrangements and the deduction of advice fees from a product (transition arrangements commenced from 10 January 2025)
- ministerial power to approve and mandated standardised client consent forms (commenced 10 January 2025)
- flexibility to provide FSG information via website disclosure (commenced 10 July 2024)
- clarity on the conflicted remuneration provisions, including for the issue of financial products where advice has not been provided in the previous 12 months (commenced 11 July 2024)
- legal certainty for the payment of advice fees from a member’s superannuation account and clarity on the associated tax consequences (commenced 10 January 2025)
- obtaining client consent for the payment of life insurance commissions (to commence 10 July 2025).
The Bill to implement Tranche 1 was passed by the Parliament on 4 July 2024 and received Royal Assent on 9 July 2024.
Tranche 1 ASIC guidance
ASIC has released the following guidance on tranche 1 of the DBFO reforms:
- Overview of the Delivering Better Financial Outcomes (DBFO) package
- Information Sheet 286 FAQs: Ongoing fee arrangements and consents (INFO 286)
- Information Sheet 287 FAQs: Non-ongoing fee requests or consents (INFO 287)
- FAQs: FSGs and website disclosure information (INFO 291)
- Information Sheet 292 FAQs: Informed consents for insurance commissions (INFO 292)
Tranche 1 transition arrangements
Tranche 1 member guidance
We have developed a series of guidance videos to assist you in understanding the DBFO changes, how they interact with each other, and the transition arrangements for each measure.
Click a video below to be redirected to the FAAA Portal to view.
When do the DBFO tranche 1 changes start?
Website disclosure information
Ongoing Fee Arrangements and client consents
Removal of the FDS obligations
FAAA Media Releases
25 March 2025
28 January 2025
4 December 2024
25 October 2024
2 April 2024
FAAA Submissions
8 July 2024
26 April 2024
