The SMSF Association has confirmed the federal government is highly unlikely to define the meaning of simple advice in Tranche 2A of the Delivering Better Financial Outcomes (DBFO) legislation despite industry calls to do so.
Tranche 2A of the DBFO package will allow public offer funds to provide financial advice to their members covering issues such as contributions, retirement income, insurance and investment options.
“What we’re concerned about is that we have a level playing field here with financial advisers. The idea is that this is just simple advice that the funds will be able to provide [and] it’s not going to be comprehensive advice,” SMSF Association chief executive Peter Burgess told attendees at the recent ASF Audits Technical Seminar 2025 held in Melbourne.
“We’ve asked for a nice definition of what’s simple [and] what’s not simple, [but] we’re not going to get that.
“What the regulators and what the government has said [is that] there’s a requirement in the law already for the trustees of these large funds to make sure they act in the best financial interest of members and they think that’s going to be sufficient to ensure that [public offer] funds don’t provide comprehensive advice.”
Burgess pointed out the thinking behind this approach is that complex financial advice cannot be provided while satisfying this trustee obligation and also the cost involved in providing this type of in-depth service will also not meet the requirement as the associated expenses will be apportioned to all fund members.
However, he indicated this attitude does not account for the individual characteristics of each public offer fund, which will have an effect on the proposed DBFO legislation.
“I think you’re likely to see, and we’ve pointed this out in our submission, variation in the types of advice the different funds offer. It won’t be a hard-and-fast rule,” he said.
“So we’re very conscious that we have a level playing field here and that’s been our main concern and the point that we’ve raised with government.”
