We note the significant consumer harm and loss of confidence these events have caused across the financial services sector.

The consultation package appropriately recognises that the circumstances surrounding Shield and First Guardian raise a range of interconnected policy issues spanning fund design and governance, distribution practices, licensee and investment governance, compensation arrangements and regulatory oversight. 

While the associations represented by the JAWG have taken different individual positions on certain proposals contained in the package, JAWG wishes to draw Treasury’s attention to the policy proposals that have consensus across our organisations. 

The JAWG also wishes to draw Treasury’s attention to proposals which have consensus opposition. The JAWG considers that these proposals are not targeted and proportionate to addressing consumer harm, and are outweighed by the unnecessary regulatory burden, additional regulatory complexity, and the significant negative impact on Australians’ access to financial advice. 

As a general principle, the JAWG considers that the priority of any reform response should be to address genuine gaps or weaknesses in the regulatory framework, rather than introduce duplicative obligations where equivalent requirements already exist. Effective oversight and enforcement by ASIC and APRA remain critical to ensuring existing legal obligations and consumer protections operate as intended. At the same time, the JAWG recognises that the events surrounding Shield and First Guardian have highlighted areas where targeted reform is warranted and, in those areas, we are pleased to express our collective support.

Reform options to support the ongoing sustainability of the CSLR

The JAWG supports several of the reforms proposed in Treasury’s consultation paper that would better align the CSLR with its original policy intent as a scheme of last resort and improve the scheme’s long-term sustainability. 

In particular, the JAWG strongly supports limiting CSLR compensation to capital losses only. It is not consistent with the concept of a scheme of last resort to compensate consumers for hypothetical investment returns, particularly where those amounts are ultimately funded by levy-paying entities that had no involvement in the underlying misconduct.

While this measure is likely to bring the most meaningful reform to support the sustainability of the scheme, the JAWG is also pleased to support a number of other reforms contained in the consultation paper, including:

• enabling the CSLR to deduct relevant offsets from compensation payments, including amounts recovered through external dispute resolution processes, insolvency proceedings, insurance arrangements and other sources of redress;
• expanding the CSLR’s subrogation and recovery rights to improve the prospects of funds being returned to the scheme, helping to reduce the burden ultimately borne by levy-paying entities; and
• Treasury further exploring mechanisms to improve the recovery of unpaid AFCA determinations within corporate groups and related entities. Given the complexity of these issues and the potential interaction with existing corporate and insolvency law frameworks, the JAWG considers that further consultation and targeted policy development is warranted before any reforms are progressed.

Given its role in setting, maintaining and enforcing the regulatory framework, the JAWG also believes the Government should share some responsibility for funding the foreseeable CSLR special levies. 

Finally, while not directly addressed in the consultation package, the JAWG is concerned with the high proportion of CSLR costs attributable to AFCA fees. Based on the CSLR’s FY27 initial estimate, AFCA fees are expected to represent $20m or 15% of the total levy borne by industry. The JAWG encourages Treasury to explore opportunities to improve the efficiency of the external dispute resolution system and identify measures that could reduce unnecessary costs while maintaining access to effective consumer redress. 

Enhancing Consumer Protections in Superannuation

The JAWG opposes the proposal to introduce mandatory waiting periods when changing superannuation funds. These measures would introduce significant friction, cost and operational complexity into the advice process while doing little to address the underlying causes of the harms identified in recent cases. Indeed, the lead AFCA determinations with respect to Shield and First Guardian show customers were often courted by lead generators over months, and therefore waiting periods would not necessarily have stopped the harm.

We also envisage unscrupulous operators will simply adjust their sales scripts and tactics to account for a mandatory waiting period. 

The JAWG also strongly opposes the proposal to prohibit advice fee deductions for switching-related advice. Assessing whether a member’s existing superannuation arrangement remains appropriate, having regard to their objectives, financial circumstances and needs is a fundamental component of comprehensive personal financial advice and good consumer outcomes. Measures that effectively discourage advisers from providing switching-related advice risk undermining access to financial advice and limiting consumers’ ability to receive professional guidance on one of their most significant financial assets.

Financial advisers are already subject to extensive obligations, including the duty to act in the client’s best interests (s961B of the Corporations Act) and provide advice that is appropriate to the client’s circumstances (s961G). Therefore, the JAWG considers that Treasury’s focus should be on identifying and enforcing the law where misconduct has occurred rather than imposing additional process requirements that apply equally to compliant advisers and consumers.

The JAWG is also concerned about potential negative impacts to member choice and competition under this proposal, both of which are important principles underpinning good consumer outcomes within our system. The proposal would have the effect of reducing access to advice, especially for members who have the least ability to pay for it from non-superannuation savings. There is therefore a risk that members become ‘stuck’ in underperforming funds with poor service or they act on unregulated ‘advice’ to switch to a different fund. 

Curbing lead generation activity

Finally, the JAWG wishes to note our joint opposition to removing or restricting the existing exemption from the hawking prohibition where personal advice is provided.

Removing or restricting the exemption would introduce friction and legal uncertainty into legitimate advice conversations, potentially discouraging advisers from raising related issues that are relevant to a client’s financial wellbeing. It will also increase compliance costs without addressing the root causes of the misconduct observed in Shield and First Guardian. 

For example, a client may initially seek superannuation advice but then broader needs across insurance, retirement planning or investments are subsequently identified and addressed. Restricting the exemption would interfere with these legitimate interactions and risk placing advisers in tension with their existing obligations.

As outlined above, financial advisers are already subject to a comprehensive suite of statutory obligations relating to advice delivery, including broader licensee obligations under the Corporations Act. The failures observed in Shield and First Guardian were not the result of a deficiency in the personal advice exemption itself, but rather instances of non-compliance with existing legislative obligations, together with broader issues relating to supervision by the AFS licensee and regulatory enforcement. Therefore, removing or narrowing the exemption would be a disproportionate response that risks limiting access to legitimate financial advice while doing little to prevent the misconduct that Treasury is seeking to address.

Next steps 

The JAWG encourages the Government to progress, as a matter of priority, those reform proposals that have attracted broad industry support across the consultation package. These areas of alignment represent practical opportunities to strengthen consumer protections, improve regulatory outcomes, reduce the costs of the CSLR, support sustainability and enhance confidence in the financial services system.

The JAWG recognise that the consultation package raises a number of complex policy issues that warrant further consideration and engagement with industry. In relation to proposals not addressed in this joint statement, each association has separately made its own submission reflecting the views and priorities of its respective membership.

JAWG is a coalition of industry and professional bodies representing financial advisers, stockbrokers, accountants, superannuation trustees and investors with the goal of making advice more affordable and accessible for consumers. Its members for this submission are: 

• Boutique Financial Planning Principals Association Inc. (BFP) 
• Chartered Accountants Australia and New Zealand (CA ANZ) 
• CPA Australia 
• Financial Advice Association of Australia (FAAA) 
• Financial Services Council (FSC) 
• Institute of Public Accountants (IPA) 
• Licensee Leadership Forum (LLF) 
• Self Managed Super Fund Association (SMSFA) 
• Stockbrokers and Investment Advisers Association (SIAA) 
• The Advisers Association Ltd (TAA)

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Issues with the current standard

The current education standard is unnecessarily restrictive, creating barriers for both aspiring advisers and existing professionals.

The lack of recognition of completed qualifications such as accounting, business, commerce and economics has made it challenging to attract new entrants as they are currently required to incur significant additional costs and time to complete an approved financial planning degree. The numbers enrolling in approved degrees have been low, and six qualifying courses were discontinued last year for this reason. This has resulted in a collapsed pipeline for new talent.

The advice gap

Unfortunately, these rigid education settings have contributed to a critical shortage of financial advisers, from a high of almost 29,000 at the start of 2019 to 15,059 as of 9 April 2026.

There is a large, and growing, advice gap in Australia. In its 2025 Financial Advice Report, Investment Trends has found that a massive 15.9 million Australians have unmet advice needs, and 1.3 million are planning to see an adviser in the next two years.

Benefits of reform

Candidates with highly suitable degrees in accounting, commerce, business, economics and finance from Australia’s top universities will be able to rely on subjects they have studied, or are currently studying, towards satisfying the standard. This will enable them to begin their professional year sooner, reducing costs and time.

The proposal also facilitates greater diversity in the profession, by ensuring that experienced professionals seeking a career change can utilise their existing degree. This is particularly important for female mid-career professionals. With women making and inheriting wealth in increasing numbers and research showing that women frequently prefer to see a female adviser, the need to attract women to the profession is vital.

Improving access to trusted, professional financial advice is critical to strengthening consumer protection and will mean fewer consumers will be susceptible to unlicensed operators, predatory forms of lead generation and high-pressure sales tactics that can cause significant consumer harm.

Importantly standards will not be reduced. The proposal introduces greater flexibility to the current very restrictive pathway. New entrants will still be required to complete the Professional Year, pass the financial adviser exam and maintain ongoing professional development.

Next steps

Each association has made their own submissions supporting the reforms and making recommendations to refine the proposal where required.

JAWG looks forward to the government implementing the reforms as a matter of urgency to allow the financial advice profession to re-build the new entrant pathway as soon as possible.

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Statement from the Joint Associations Working Group 

The Joint Associations Working Group (JAWG) is calling for crucial amendments to the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, to avoid significant unintended consequences and unfair outcomes for consumers, small businesses, advisers and the government.

Together, Schedules 1 to 3 to the Bill and the Imposition Bill are designed to reduce the tax concessions available to individuals with a total superannuation balance exceeding $3 million.

JAWG members have identified four key issues which need to be addressed before the Bill is legislated:

1. Taxing unrealised capital gains – an outworking of the calculations in the Schedules will see tax levied on the increase in the capital value of an asset, as well as actual taxable earnings. Capital Gains Tax will also be levied when the assets are sold;
2. The absence of indexation – the $3 million threshold, left unindexed, will lead to generational inequity and unnecessary uncertainty for the superannuation system;
3. Clarity on the proposed treatment of members in defined benefit funds, especially those already in receipt of pensions; and
4. The impact of material increases to liquidity requirements for funds holding large and unlisted assets such as family farms and business real property.

Applying different tax rates on capital gains, both notional and realised, is unnecessarily confusing and complicated. 

The JAWG has broad industry concerns about the consequences of this approach, including both the impact on small business and primary producers who hold their small business premise and primary production land in an SMSF, and the constraints of applying these provisions in large funds.

The JAWG notes there are other ways of reducing the tax concessions available to individuals with large superannuation balances that do not involve taxing unrealised capital gains.

We recommend the removal of Schedules 1 to 3 from the Bill to enable more holistic consultation on measures which achieve the Government’s objective of achieving greater equity, and which are consistent with existing taxation principles.

Background

According to ATO statistics, over $90 billion of commercial property (mainly small business premises and primary production land) is held by SMSFs. Industry research estimates around one in four SMSF members, impacted by this tax (13,500 SMSF members) hold real property in their fund.

Including unrealised capital gains in the calculation of earnings is likely to cause liquidity stress for many individuals and business entities impacted by this tax. The University of Adelaide estimates that had this tax been introduced in the 2021 and 2022 financial years, over 13 per cent of impacted members would have experienced liquidity stress in meeting the new tax obligations^[1].

Some small business owners will be forced to sell their business premises to save their business. Selling such assets is typically associated with substantial transaction costs and market timing considerations that are likely to further exacerbate potential losses and introduce other investment risks. 

The treatment of unrealised capital gains and carried forward losses in the Schedules presents substantial challenges given the nature of capital markets. It is not uncommon to see several bull market years followed by a sharp market decline. This means many members will effectively be cumulatively taxed on investments that make an overall loss when eventually sold without any real recourse to recover the tax already paid.

Including unrealised capital gains in the calculation of earnings means an individual’s year-on-year tax liability will be directly related to the performance of investment markets, adding to the unpredictability and making liquidity management extremely difficult.

The JAWG notes the root cause of these issues is the departure of the use of actual taxable earnings as the basis for calculating “earnings”. Including unearned income in the calculation immediately gives rise to unintended consequences and inequitable outcomes. 

The JAWG acknowledges the constraints and limitations faced by some funds in tracking actual taxable earnings allocated to a member. However, one alternative could be the use of an earnings rate that is a close proxy for actual taxable earnings. The 90-day bank bill rate is used in other areas of the superannuation legislation to approximate earnings.

We also call for the indexation of the $3 million threshold by average wage increases to ensure it retains its relative value, promoting stability and equity in the superannuation system.  Leaving the cap unindexed would mean over 500,000 current taxpayers would be adversely affected by the time they retire, or over six times current Government’s estimate. Further, a 30-year-old today will have a real cap of around $1 million in today’s dollars.^[2]

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The Joint Associations Working Group (JAWG) has proposed some core principles to strengthen the education standard for new entrants to the financial advice profession. These principles aim to enhance the flexibility of the education standard for new entrants while maintaining professional standards.

The number of financial advisers has reduced by 46 per cent since the peak in 2019, and only 381 new entrants joined and remained in the profession in 2023. With access to financial advice increasingly out of reach for many Australians, encouraging more advisers to the profession is now vital.

Only a small number of tertiary educators offer financial planning studies, with many already reducing their courses.

Under the JAWG proposal, the minimum requirement for new entrants would remain a tertiary degree. Importantly, the existing approved programs would remain valid and available. This proposal gives new entrants and career changers greater flexibility by recognising more of their pre-existing degree courses, while maintaining appropriate qualification levels to ensure consumer protection.

The joint position of the advice associations sector has been welcomed by the government, and JAWG members have met with Treasury to commence discussions on the proposal to refine in further detail and JAWG looks forward to collaborating broadly with the sector to ensure education requirements ultimately support more new entrants into the profession.

Core elements of the proposal

The proposal builds on the August 2022 Treasury consultation paper and includes the following key elements:

• Five core knowledge areas with a further three elective knowledge areas to be chosen from a broad list that recognises different streams of financial advice. Examples of elective knowledge areas could include SMSF Advice, portfolio management and aged care. 
• The ability to complete study units across multiple programs that can be supplemented by bridging units either contemporaneously or later if required.
• The curriculum is to be set and maintained by a broadly representative advisory group, including representatives from associations and academia.

About the Joint Associations Working Group 

The Joint Associations Working Group is a coalition of 11 industry and professional bodies representing financial advisers, stockbrokers, accountants, superannuation trustees and investors with the goal of making advice more affordable and accessible for consumers. Members include:

• Boutique Financial Planning Principals Association Inc. (BFP)
• Chartered Accountants Australia and New Zealand (CA ANZ)
• CPA Australia
• Financial Advice Association of Australia (FAAA)
• Financial Services Council (FSC)
• Financial Services Institute of Australasia (FINSIA)
• Institute of Public Accountants (IPA)
• Licensee Leadership Forum (LLF)
• Self Managed Super Fund Association (SMSFA)
• Stockbrokers and Investment Advisers Association (SIAA)
• The Advisers Association Ltd (TAA)

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The Joint Associations Working Group (JAWG)^[1] supports the implementation of the Quality of Advice Review’s recommendations to make financial advice more accessible and affordable to millions of Australians.

Quality financial advice can have a significant positive impact on the financial wellbeing of an individual. However, for many years there has been much discussion but no effective action to make financial advice more affordable and accessible to more Australians.

With five million Australians near to or at retirement and fewer than 16,000 financial advisers, the need for effective regulatory reform is even more pressing.

The JAWG believes that the Quality of Advice Review provides a series of carefully considered recommendations that taken together represent a holistic package of reform that will protect consumers and make advice safer, more accessible, and more affordable.

However, we also understand that to implement all of the recommendations as a holistic package may take significant time. In the interim, many Australians will continue to be denied access to the financial advice they need, or worse, may seek or otherwise receive advice from other unqualified channels to their financial detriment.

In acknowledging the Government’s commitment to resolving this issue for the good of all consumers, the JAWG supports the review recommendations being implemented in stages, rather than as a holistic package. This will ensure immediate gains can be made, including substantially reducing the cost of accessing financial advice.

The JAWG believes that the following recommendations can be implemented in the immediate short term:

1. Reforms to documentary requirements

• Recommendation 8 – Repeal Fee Disclosure Statements and introduce a ‘standard fee consent form’
• Recommendation 9 – Reform the requirement to provide a statement of advice in its current form
• Recommendation 10 – Financial Services Guides that can be accessed via a business’s website, or which continue to be provided in the current form
• Recommendation 11 – Require a client to provide written consent to being treated as a wholesale client

2. Best Interests Duty

• Recommendation 5 – Replace the existing best interests duty and related obligations (the duty to give appropriate advice, the duty to warn the client and the duty of priority) with a new statutory best interests duty that is a true fiduciary duty and does not include a safe harbour

3. Design and Distribution Reporting Obligations

• Recommendation 12.1 – Amend the reporting obligations for relevant providers

4. Deduction of fees and client directed payments

• Recommendation 7 – Adoption of clearer member directed charging requirements for the provision of personal advice by Superannuation Funds

5. Conflicted remuneration

• Recommendations 13.1-13.9 – Tighten some of the exemptions on the ban on conflicted remuneration

These short-term reforms have the collective potential to reduce the cost of advice, making advice more scalable and more accessible.

JAWG believes that recommendations that will require a longer timeframe to implement include:

Definitions

• Recommendation 1 – Revise the definition of Personal Advice
• Recommendation 2 – General Advice warning
• Recommendation 3 – Amend the definition of Relevant Provider

Amendments to the Code of Ethics to remove any inconsistencies with the new best interests duty.

Good Advice

• Recommendation 4 – Introduction of the Good Advice Duty

Design and Distribution Obligations

• Recommendation 12.1 – Limit the exception to the Reasonable Steps obligation in the distribution of financial products under the Design and Distribution Obligations to relevant providers.

The JAWG looks forward to collaborating with the Government on implementing much needed change and collectively working towards our common goal of making quality financial advice accessible and affordable for more Australians.

——–

[1] The Joint Associations Working Group (JAWG) is an established working group comprising key associations representing Australia’s financial services industry and professional financial advisers. Collectively, the JAWG represents more than 90 per cent of advisers on the Financial Advisers Register (FAR), and most major financial services firms. The associations have individually and collectively taken leadership roles in their sectors in Australia and globally dating back to at least 1886.

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Stephen Jones

The Joint Associations Working Group, consisting of 13 financial services industry associations who share a common goal to make quality financial advice more accessible to the community, welcomes the release of the final report of the Quality of Advice Review. We say it’s time to fundamentally reform the advice regime to ensure consumers can get the advice they want and need.

The Quality of Advice Review sets the reform foundations needed to ensure consumers can access the affordable and high-quality financial advice they want and need. We want this review to be a trigger to finding a real solution to what is a growing problem for many Australians.

This report includes a comprehensive suite of recommendations, which together would address many of the current problems with the financial advice regulatory regime. This would enable more good quality financial advice to be provided to more Australians.

Importantly, the final report holds consumers’ best interests paramount.

In order to meet the advice needs of Australian consumers, we agree it’s time to think differently about who can provide financial advice and how that is advice is provided, while ensuring consistent consumer protections by all advice providers.

The current regulatory framework is a major impediment to consumers being able to access affordable quality financial advice.

Years of constant reform aimed at protecting consumers have resulted in a significant regulatory wall between the consumer and the opportunity to access the advice they demand.

Retaining the status quo will only increase the advice gap, denying more Australians access to the financial advice they need to improve their financial wellbeing.  This will be to the substantial detriment of many Australians.

We believe that it’s time for the regulatory regime to be fundamentally reformed to ensure the advice needs of Australians are finally met.

The Quality of Advice Review has challenged the thinking of many, presenting very different ways to address long-standing problems.  It was never going to be easy to address the problems which Minister Stephen Jones described as a “hot mess” in June 2022.  This report presents a framework to make those changes and to put the interests of consumers front and centre.

We thank Michelle Levy for her broad engagement and consultation with all stakeholders, and a report which provides the catalyst for a strong reform agenda focused on the consumer.

We look forward to working collaboratively with the government and other stakeholders to deliver real reform that will ensure Australians can finally access the quality, affordable financial advice they need.

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Michelle Levy

The Joint Associations Working Group (JAWG) welcomes the publication today of the Quality of Advice Review (QOAR) Proposal Paper.

The Quality of Advice Review is critically important given its focus on how to improve the current system of providing financial advice for the benefit of all consumers.

This Proposal Paper demonstrates the Federal Government’s ongoing commitment to an independent review aimed at identifying suitable ways to improve access to quality, affordable and accessible financial advice for all Australians. The Paper sets out proposals to make it easier for consumers to have meaningful, fit-for-purpose conversations with their advice provider about all or part of their financial and lifestyle objectives while maintaining robust consumer protections — an objective the JAWG supports. We also take the opportunity to acknowledge the quality and depth of the engagement from the QOAR team led by Michelle Levy, given the complexities and range of issues involved.

In our earlier submission to the QOAR in response to the issues paper, we advocated  for a range of solutions aimed at achieving a sensible balance of consumer protections and regulatory oversight required to achieve these outcomes. As a coalition of associations, the JAWG understands and values the broader community good and significant social benefits that come from financial advice done well, and we look forward to continuing our engagement with Treasury, Government and other stakeholders to advance this agenda.

Read the submission.

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The JAWG calls on the Quality of Advice Review to take up recommendations to reduce the compliance burden and deliver affordable and accessible advice to more consumers.

The Joint Associations Working Group (JAWG) has collaborated to lodge a submission to Treasury’s Quality of Advice Review calling for a more consumer-focused regulatory approach, reduced costs, and greater recognition of professional judgement.

Existing regulatory requirements are confusing, complex, and overwhelming and mandate a one-size-fits-all advice process that neither caters for, nor considers, the individual needs and circumstances of each consumer. This could be addressed by ensuring advice is less costly to produce and presented in a way that is meaningful and more easily understood by individual consumers, under a principles-based, consumer-focused regulatory framework that encourages professional judgement.

The submission makes several recommendations and observations that include:

• A regulatory regime that supports an advice process aligned to professional judgement and the situations of individual consumers guided by professional standards, as opposed to compliance with prescriptive regulation, has several advantages including lower compliance costs via a risk-weighted approach to advice outcomes, and recognition of the advice sector as a profession.
• The removal of the safe harbour steps from the Corporations Act, and clarity on what is needed to satisfy the Best Interests Duty must be provided.
• Open data and the sustainability of the financial advice sector are key prerequisites to improving access to affordable quality professional advice and encouraging innovation in the sector.  There is a significant amount of unnecessary waste in the system that leads to additional cost, time and resource requirements for consumers and advice providers. Much of this waste could be reduced or eliminated through access to up-to-date and reliable data that is already available within the financial services ecosystem.
• A profession-wide position on the tax deductibility of initial and ongoing advice fees and a review of the ASIC industry funding model are needed.
• Retention of professional standards and education requirements while reviewing the one-size-fits-all education pathway with respect to current and potential advice specialisations and business models.

The JAWG calls on the Quality of Advice Review to take up these recommendations to reduce the compliance burden and deliver affordable and accessible advice to more consumers.  

The Joint Associations Working Group (JAWG) is an established working group comprising key associations representing Australia’s financial services industry and professional financial advisers. Collectively, they represent more than 90 per cent of advisers on the Financial Advisers Register (FAR), and most major financial services firms. The associations have individually and collectively taken leadership roles in their sectors in Australia and globally dating back to at least 1886.

Members of the JAWG are:

1. Association of Financial Advisers
2. Boutique Financial Planning Principals Association Inc.
3. Chartered Accountants Australia and New Zealand
4. CPA Australia
5. Financial Planning Association of Australia
6. Financial Services Council
7. Financial Services Institute of Australasia
8. Institute of Public Accountants
9. Licensee Leadership Forum
10. Self Managed Super Fund Association
11. Stockbrokers and Investment Advisers Association
12. The Advisers Association Ltd

Read the joint submission.

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