Sarah Abood
Yesterday’s National Press Club address by Assistant Treasurer and Minister for Financial Services Daniel Mulino included welcome progress on the response to Shield and First Guardian, but further action is needed to enable more Australians to access advice, says Sarah Abood, CEO of the FAAA.
“We have seen the impact of disasters such as Shield and First Guardian on everyday Australians and we welcome the Government’s work to prevent such catastrophes happening again in the future.
“It is more critical than ever that Australians have access to comprehensive advice that is affordable and accessible, otherwise they will be more vulnerable to scams and fraud.
“While some of the reforms announced today by Minister Mulino will help achieve the stated aims, we are concerned that others may limit the ability of financial advisers to help Australians manage their finances and plan for their retirement,” Abood said.
Lead generation
“We welcome decisive action to crack down on unlicensed lead generation, however, we are concerned the proposed anti-hawking exemption changes could affect financial advisers’ ability to support clients and their families, particularly during critical life events.
“The Government’s further consultation on the anti-hawking changes must cover all reasonable contact between a financial adviser and clients and their families and other related parties, for example an external power of attorney. Professional to professional referrals and other genuine referrals must also be allowed.”
Superannuation and MISs
The FAAA supports the significant changes that will require superannuation fund trustees who are responsible for harm to fully compensate consumers at an earlier stage. This reduces compensation claims that flow through to the CSLR and ultimately fall on financial advisers.
“We encourage the Government to extend this approach to managed investments schemes as they have historically been at the centre of catastrophic collapses. The stronger governance requirements to be placed on MISs are critical to preventing future problems.”
CSLR
The FAAA is pleased the Minister has acknowledged the concerns it has continuously raised with him about the impact of ongoing levies on financial advisers, however at this stage he has not specified a figure for the 2026/27 special levy which is critical for members.
“We will continue to advocate to the government that financial advice should not pay more than $20 million in total CSLR levies and will work closely with the Minister to resolve this.”
The FAAA also welcomes the removal of the ‘but-for’ compensation model, however continues to call for AFCA being able to consider complaints about the management of a super fund or scheme ‘as a whole’ to improve the sustainability of the CSLR.
“Basing CSLR compensation on actual losses is a decision we’ve pushed for consistently, so we are pleased the Minister has heeded this.”
Delivering Better Financial Outcomes (DBFO) reforms
“Improving access to simple, affordable advice is essential to help Australians understand complex financial products and make informed decisions. As such, we are disappointed that the new class of adviser (NCA) will be limited to select large institutions. Consumers need choice in how they access this simpler, lower-cost form of advice. It should be an option for financial advice practices to allow them to help more Australians. The FAAA will hold the government to account on its commitment to ensure the NCA does not encroach on the type of work financial advisers do.
“We welcome the Minister’s scaled advice changes and ongoing commitment to prioritise reform of new financial adviser education standards.
“There are also a number of proposals from the consultation process that haven’t yet been addressed, including preventing phoenixing, however there are others that we welcome the Government not proceeding with such as delaying super switching and banning advice fees for switching super funds.
“We thank the Minister, his office and Treasury for their engagement,” Abood says.