FAAA welcomes the release of the draft legislation.
From Sarah Abood, CEO of the FAAA
“The FAAA welcomes the release of the draft legislation on the first tranche of recommendations from the Quality of Advice Review.
“We have been strong advocates for sensible measures from the Review that will help advisers deliver more affordable and effective advice for Australians.
“We are very pleased that the recommendation (Recommendation 8) on ongoing fee arrangements and consent requirements is to be included in the draft legislation. This recommendation is to consolidate ongoing fee consent requirements to a single standard “consent form”. Delivering on this recommendation will save many hours of frustrating, inefficient and unnecessary work for both advisers and their clients and we are very happy to see this included in the first tranche of legislation.
“Another piece of important news for our members is confirmation that commissions on life insurance (Recommendation 13.7) can continue to be paid to advisers, with a one-off written consent from the client before the beginning of the policy.
“However, we are concerned that the rationalisation of Statements of Advice (Recommendation 9) and the removal of safe harbour steps from the best interests duty (Recommendation 5) have not been included in the draft legislation at this time. These are important elements in cutting unnecessary red tape and have the potential to meaningfully reduce the cost of providing advice. We will be seeking further clarification from the Government on the timeframe for these measures.
“The recommendation that clients be required to give informed consent to be treated as wholesale clients has not been addressed at this stage. It may be awaiting the outcomes of the recent MIS review.”
The FAAA also welcomes the Government’s commitment to announce its final position on the outstanding recommendations of the Quality of Advice Review before the end of the year, with further legislation to be released in 2024.
“FAAA members and their clients are looking forward to the certainty that this legislation will bring to the advice process. We are keen to see the Government move quickly on the remaining recommendations to eliminate the remaining unnecessary red tape and ensure we can expand the availability and affordability of financial advice for all Australians. It is also important we see a quick turnaround on this draft legislation so real reforms are implemented as soon as possible.
“The FAAA will respond fully to the draft legislation later this week with an update to members.”