FAAA welcomes Delivering Better Financial Outcomes legislation, with one key concern

The FAAA is pleased to finally see the first instalment of the promised changes emanating from the 2022 Quality of Advice Review (QAR) tabled in the Parliament. 

FAAA CEO Sarah Abood says, “It’s good to see that this legislation addresses a number of the concerns that we identified in the draft legislation released in November 2023. These include: 

• there is now the ability to mandate a standardised fee consent form, 
• there is specific recognition that fee consent can be provided electronically, and 
• flexibility to bring forward anniversary dates for client renewals has been added. 

“However, we have a strong concern with respect to the requirements for super fund trustees processing financial advice fees. This legislation places specific obligations on them before advice fees can be paid (under a new sub-section, 99FA, of the Corporations Act).  There is no clarity as to how these obligations will be met by trustees. 

“The risk we see, is that this could cause significant extra work for financial advisers who may be asked to provide additional specific documentation, such as Statements of Advice and invoices. This will also require onerous processing by trustees.  

“There are also questions about how advisers will reconcile their duties around privacy and client data protection with the requests trustees may make. This area requires more work to ensure obligations can be met efficiently and effectively. 

“We will continue to work with members over coming weeks on the implications of these changes for their businesses, as we finalise our views and respond to the inquiry being undertaken by the Senate Economics Committee. 

“The financial advice profession has been eagerly awaiting the implementation of the QAR reforms. This legislation is an important step, and we are keen to see the draft legislation for the next tranche of reforms, which has been signalled as being released around mid-year. The timely delivery of genuine efficiency benefits that enhance the delivery of financial advice to clients is critical for the advice profession.”