Draft legislation delivering the first tranche of the Delivering Better Financial Outcomes package of reforms has been released for consultation.
The package includes amendments that will provide legal certainty for the payment of adviser fees from a member’s superannuation fund account and remove onerous red tape that adds to the cost of advice with no benefit to consumers.
The draft legislation responds to several recommendations of the Quality of Advice Review, including:
- Recommendation 7: clarifying the legal basis for superannuation trustees reimbursing a member’s financial advice fees from their superannuation account, and associated tax consequences;
- Recommendation 8: streamlining ongoing fee renewal and consent requirements and removing the requirement to provide a fee disclosure statement;
- Recommendation 10: providing more flexibility on how FSG requirements can be met;
- Simplifying and clarifying the provisions governing conflicted remuneration, including:
- Recommendations 13.1 and 13.3: clarifying that monetary or non-monetary benefits given by a client are not conflicted remuneration along with the removal of consequential exceptions;
- Recommendation 13.4: removing the exception to conflicted remuneration rules for the issue of financial products where advice has not been provided in the previous 12 months;
- Recommendation 13.5: removing the exception to conflicted remuneration rules for agents or employees of Australian Authorised Deposit-Taking Institutions (ADIs); and
- Recommendation 13.2: introducing a specific exception to the conflicted remuneration provisions that permits a superannuation fund trustee to pay a fee for personal advice where the client requests the trustee to pay the fee from their superannuation account.
- Recommendations 13.7 to 13.9: introducing new standardised consent requirements for life risk insurance, general insurance and consumer credit insurance commissions.