Treasury has released a draft bill to enshrine half of the recommendations of the Quality of Advice Review (QAR) into law, with plans to deliver further legislation next year to address the remaining recommendations.
Assistant Treasurer and Financial Services Minister Stephen Jones said the Treasury Laws Amendment (2024 Measures No 1) Bill 2024 was aimed at removing red tape for financial advisers and lowering the cost of providing advice to consumers.
“Today, the government is releasing the first tranche of legislation for its Delivering Better Financial Outcomes package of reforms. Releasing this legislation delivers on the government’s commitment outlined in its Roadmap for financial advice reform to develop legislation through 2023,” Jones said.
“The draft legislation in this first tranche adopts half of the recommendations of the Quality of Advice Review [and] as promised in the roadmap, the government will also 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.”
The proposed bill addresses 11 out of the 22 recommendations from the QAR, including the consolidation of ongoing fee consent documents into one document, flexibility in how financial services guides are provided, clarifying that monetary or non‑monetary benefits given by a client are not conflicted remuneration and adding written consent requirements for consumers before they purchase an insurance product that will result in a commission payment.
Financial Advice Association Australia (FAAA) chief executive Sarah Abood expressed approval for the bill’s introduction and said the legislation is expected to bring increased certainty to the financial services sector.
“The FAAA welcomes the release of the draft legislation on the first tranche of recommendations from the Quality of Advice Review,” Abood said.
“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.”
Financial Services Council chief executive Blake Briggs said the legislation was just the first step in fulfilling the recommendations put forward by the QAR.
“The government’s release of exposure draft legislation is a down payment on their commitment to make financial advice more affordable and accessible to Australian consumers,” Briggs said.
“This modest package of changes is just the start, however, to ultimately reduce the cost of providing financial advice, which has been pushed to over $5000 by layers of regulation and red tape.”