The Albanese government has rolled out the next tranche of its advice reforms, setting rules for super-funded advice fees and allowing targeted prompts to boost member engagement.

The government is taking significant steps to make financial advice more accessible and affordable for Australians by reforming current financial advice rules.

The new measures, outlined in the Delivering Better Financial Outcomes package, aim to reduce the high costs of financial advice that often prevent people from seeking guidance on savings, retirement, and insurance.

At the heart of the reform is the commitment to streamline existing regulations that have added unnecessary costs without benefiting consumers. The goal is to simplify the process, allowing more Australians to access quality advice without the hefty price tag that often comes with it.

“Reforming the best interests duty and removing the safe harbour steps will provide advisers with confidence to deliver appropriately scaled advice. The new class of adviser is also vital to allowing life insurers, financial advice licensees, superannuation funds and other institutions to expand the supply of quality and affordable advice to consumers,” Financial Services Minister, Stephen Jones said.

“These remaining pieces will be consulted on and combined with the draft legislation released today to be introduced into Parliament as a single package. The whole package works together to expand access to affordable, quality financial advice.”

The government has announced the first components of the next phase of legislation, which include:

• Replacing the current statement of advice with a more practical client advice record.
• Establishing clear rules regarding which financial advice topics can be charged collectively through superannuation.
• Enabling superannuation funds to provide targeted prompts to members at key life stages, encouraging better engagement with their superannuation plans.

In addition to these measures, the government is also working to modernise the best interests duty and create a new class of financial adviser. These changes aim to give advisers greater confidence to provide advice that is appropriately tailored to individual needs. Removing the “safe harbour” steps from the best interests duty will help reduce complexity in the advice process, further lowering costs for consumers.

The introduction of a new class of adviser will also allow a broader range of institutions—including life insurers, financial advice licensees, and superannuation funds—to offer affordable and high-quality advice to a wider audience.

It is proposed that NCAs will need to complete relevant education at AQF Level 5, which is equivalent to a Diploma. While the government confirmed this education standard will serve as an additional entry point for financial advisers, FINSIA would like to see these education standards contribute to the education requirements for a fully qualified adviser. This will better assist in improving future adviser numbers.

The government has emphasised that these reforms are not just about cutting red tape, but about ensuring that financial advice is accessible and meets the needs of everyday Australians.

Public consultation is open until 2 May 2025 on the Treasury website, and the government encourages feedback to ensure the reforms effectively address the issues at hand and deliver tangible benefits to the financial advice industry and its consumers.

These changes mark an important step in the Albanese Government's ongoing efforts to overhaul the financial advice landscape, making it easier for Australians to navigate their financial futures with confidence.