Assistant Treasurer Jones has been a strong advocate for creating lasting reforms that will secure Australians’ financial futures, including the Government’s Delivering Better Financial Outcomes reforms and promoting certainty for Australians on the use of genetic tests in life insurance.

“Australia’s life insurance industry extends our sincere thanks to Assistant Treasurer Jones for his long-standing commitment to Australia’s financial services customers and collaborative approach with our industry,” Chris Cupitt, CALI CEO said.

“Under his leadership, the Federal Government set out a pathway to reform to help make financial advice more accessible and affordable for all Australians.

“We congratulate him on his retirement and acknowledge his dedicated public service to the Australian people.”

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Regulatory framework for financial advice will continue at pace in 2025.

The evolution of the regulatory framework for financial advice will continue at pace in 2025, giving advisers and licensees little respite from changes which can impact them, their businesses, and their clients.

In addition to the well-publicised Delivering Better Financial Outcomes (DBFO) Tranche 1 reforms that come into effect in 2025, advisers must also be conscious of changes to the broader regulatory framework applying to advice businesses – including legislation relating to privacy and cyber security for example – as well as the areas the corporate regulator, ASIC, is likely to have a heightened focus on for the year ahead.

By understanding this regulatory ‘big picture’, advisers can not only ensure their compliance with confirmed changes, but they can also better position their businesses for the future, by factoring reform trajectories into critical business decisions in areas such as technology, processes, people, and even business models.

This article will therefore serve as a primer for advisers to understand what changes are locked in, what changes are coming, and what areas ASIC will be paying extra attention to in 2025.

Structure of this article

This article will be organised into three main sections, firstly looking at the DBFO legislation, and the related changes taking effect in 2025 (some of which were only detailed at the end of 2024). The second will examine two pieces of legislation that are not financial services specific, but which will still impact many licensees and advisers. And finally, we will recap those areas under to be put under the microscope by ASIC over 2025.

1. DBFO: Key dates in 2025

Key Date number 1: January 10, 2025

Two important DBFO changes become effective on this date. One, relating to trustee oversight of advice fees authorised by members, has being controversial, with some experts believing the legislation is poorly worded and could see some ultra-conservative (and/or non-adviser friendly) funds choose to scrutinise every single SOA before agreeing to a fee deduction.

While ASIC, and Minister Stephen Jones, have gone to great lengths to provide assurance that this is not the intent^[1], many advisers are holding their breath, awaiting the proof that will come in the form of actual trustee behaviour post January 10.

A recap of that change:

• Amendments to the SIS Act (s99FA) intended to clarify the legal basis for trustees to pay advice fees agreed to by a member. Trustee obligations include the following:
  • Ensure the advice given is personal
  • Ensure the cost of advice aligns with the term of the member’s written consent
  • Ensure the appropriate consent requirements are met, including ongoing fee arrangements.

The second change to take effect on 10^th January relates to Ongoing Fee Arrangements, effectively giving advisers much more flexibility around timing and format.

Key aspects of this reform include:

• Remove the requirements to provide clients with a Fee Disclosure Statement
• Require advisers to obtain client consent for ongoing fees via a standardised written consent form
• Replace “anniversary date” with “reference date” for determining the renewal period, with a new consent required between
  • Up to 60 days before, and
  • On or before 150 days after the reference date.

(This last change introducing far more flexibility than the current 120-day period commencing on the anniversary date of the arrangement).

Introducing the new reference date

The reference date concept – introduced as part of the change to ongoing fee arrangement consents – has caused confusion for some. ASIC have produced examples which help clarify the setting and changing of reference dates, which can be found in their Information Sheet 286, updated and reissued in November 2024^[3].

Key date number 2: July 9^th, 2025

On this date, new consent requirements become effective for life insurance commissions. In simple terms, life commissions which are (a) within the limits prescribed by the Life Insurance Framework requirements, and (b) accompanied by the appropriate client consent, will be exempt from the ban on conflicted remuneration.

The consent – a new document – must include the following information:

• Name of the insurer
• Commission rate
• If more than one monetary benefit will be given in connection with the issue or sale of the relevant product, the frequency of giving those monetary benefits and the period over which monetary benefits covered by the consent could be given, including any renewals;
• The nature of any services that the AFSL or authorised rep will provide the client in relation to the relevant product;
• A statement that “it is a requirement of the law that client consent must be obtained before payment of an insurance commission”; and
• The fact that the consent is irrevocable.

Importantly, these guidelines mean that – provided the rate of commission on renewal does not exceed that disclosed in the initial consent – no further consents are required, meaning the consent is a one-off, for the life of the policy.

ASIC updates regulatory guidance to support DBFO changes

In November 2024, ASIC issued 4 new information sheets^[4] – and updated several existing Regulatory Guides – in response to DBFO Tranche 1.

The new Information Sheets are:

• INFO 286 FAQs: Ongoing fee arrangements and consents
• INFO 287 FAQs: Non-ongoing fee requests or consents
• INFO 291 FAQs: FSGs and website disclosure information
• INFO 292 FAQs: Informed consents for insurance commissions.

Updates were also made to RG 246, and 175.

The Information Sheets in particular are very helpful, containing practical examples of the changes in action, and it is recommended readers familiarise themselves with these resources as soon as possible.

So what about DBFO Tranche 2?

Advisers busy in the lead up to the end of 2024 could be forgiven if they missed the announcement by Treasury about DBFO Tranche 2, made public on 4^th December^[5].

The more significant of the two tranches, in terms of its capacity to improve the accessibility of advice, Tranche 2 may well prove to be the most contentious, tackling issues such as Statements of Advice and Safe Harbour, while also introducing a new tier of advice.

Generally light on detail, Treasury’s announcement split the proposed changes into two categories:

• A ‘new class of financial adviser’, and
• Modernising financial advice.

The ‘new class of adviser’ (previously referred to as ‘Qualified Advisers’) proved to be a controversial topic throughout 2024, with critics claiming it was opening the door to the return of vertical integration.

The policy intent is to create a new tier of advisers who – by virtue of needing lesser qualifications and being restricted to very simple advice – can open up advice to a wider audience by being much cheaper.

Despite fears that this type of adviser might be limited to product providers and super funds, the December announcement clarified that this option is also open to traditional advice licensees, opening up exciting new ways for advice firms to service clients who are lower value, and/or have simple needs for episodic advice.

Licensees will be able to charge for services provided by new class advisers

Critical to making this a viable option for licensees is the government about face on charging fees for the services provided by new class advisers, with licensees being allowed to charge one-off fees for such a service^[6].

New class of adviser – guidelines

• Licensees that employ the new class of adviser will be wholly responsible for the advice provided. Licensees will be subject to additional monitoring and supervision obligations (with civil penalties attached) to ensure that their employees only provide advice within their expertise and authorisation and comply with the Best Interests Duty and other obligations.
• The new class of adviser will be required to complete an AQF level 5 diploma, to ensure they have the expertise to provide high-quality simple advice.
• The new class of adviser will be restricted to advising only on products issued by prudentially regulated entities and will be prevented from providing advice on more complex and high-risk areas such as establishing a self-managed superannuation fund.
• The new class of adviser will be limited to advising existing customers of a licensee, and new customers where the new customer initiates the advice request. This will ensure the new class cannot be used to cold-call new customers or offer unsolicited advice.
• Licensees employing the new class of adviser can opt to charge a fee for the advice provided by the new class of adviser. They will not be permitted to charge ongoing fees or receive commissions to ensure the adviser is focused on providing simple, episodic advice.

Modernising financial advice

The remainder of the package includes, but is not limited to:

• Modernising the Best Interests Duty into an outcomes-focused duty and removing the existing process-based safe harbour steps.
• Replacing Statements of Advice with a principles-based record that is in plain English and addresses the client’s needs.
• Clarifying the rules on what advice topics can be paid for via superannuation.
• Reviewing and updating The Financial Planners and Advisers Code of Ethics
• Reviewing the education pathway for professional advisers with a view to increasing flexibility in support of the growth and continuing professionalisation of the financial advice industry.

Timeframe for Tranche 2

Stephen Jones has previously stated his intention to see Tranche 2 passed by May 2025^[7], however with a federal election to be held before the middle of 2025, there is significant doubt about whether the legislation can be drafted, tabled, and passed before Australia goes to the polls.

While there is uncertainty around the outcome of that election, both major parties are committed to closing the loop on DBFO, with shadow financial services minister, Luke Howarth, previously stating his intention to implement the reforms if there was a change of government:

“We support the [Michelle] Levy review in full and wouldn’t go back to the drawing board. We want to get the industry reform done as quickly as possible as time is of the essence. The work has been done; it just needs to be implemented asap. We wouldn’t be reinventing the wheel.”^[8]

2. New legislation around privacy and cybersecurity

Cyber Security Bill 2024 becomes law

A little left field – but very important for medium to large licensees – is the introduction of compulsory ransomware reporting from May 29^th. This requirement, to apply to all businesses with turnover of $3m or more, was introduced as part of The Cyber Security Bill 2024, passed by Parliament in the last week of November^[9], at the same time as major changes to the Privacy Act (discussed in more detail below).

Part 3 of the Cyber Security Act sets out mandatory reporting requirements for entities that experience a cyber security incident and elect to pay any ransom or extortion payment demanded by the perpetrator of the incident. The reporting obligations also extend to entities who are aware that another entity – e.g. an accountant or lawyer or IT consultant – has provided a ransomware payment on its behalf.

A reporting business entity must make a report – through the cyber.gov.au website – within 72 hours of making the ransomware payment or becoming aware that the ransomware payment has been made.

With the frequency and sophistication of cybercrime continuing to increase, so too will the frequency of firms electing to pay ransoms in order to restore normal business operations. Financial advice firms, with access to sensitive client data, remain an attractive target for cybercriminals which is why this requirement is particularly relevant.

Privacy reforms will also impact medium to large advice firms

The slew of legislation passed by the Federal Parliament at the end of November 2024 also included the first tranche of long-awaited reforms to the Privacy Act^[10].

While the government initially intended to remove the small business exemption – which would have effectively seen all businesses subject to the 13 Australian Privacy Principles – intensive lobbying^[11] by small business representatives proved successful, and the final legislation left the exemption in place for businesses with annual turnover under $3m.

These changes – now more relevant to medium and large advice firms – include:

•  a new cause of action in tort for serious invasions of privacy
• a new criminal offence of ‘doxxing’
• new civil penalty provisions for interfering with the privacy of individuals and new OAIC powers to issue infringement notices and compliance notices
• new Ministerial powers to ‘white-list’ countries that provide substantially similar privacy protections, in order to assist entities disclosing personal information overseas
• a new requirement for privacy policies to include information about automated decision-making
• clarifying that taking ‘reasonable steps’ to protect the security of personal information includes implementing ‘technical and organisational measures’.

FAAA expresses concern over the impact of AI on privacy

While the FAAA indicated it was supportive of the Privacy Act changes, it did express concern that the changes were not keeping pace with changes in technology, especially Artificial Intelligence, which is increasingly used by advisers when handling client data.

The FAAA noted in its submission on the changes:

“Many financial advisers are adopting technology to assist with day-to-day planning activities, which inevitably involves the handling of client personal and sensitive data. As in many sectors, it is becoming more and more common for AI tools to be used to record client meetings and transcribe these into file notes.
“Given the breadth and often sensitive nature of client data disclosed during client meetings, the use of AI software for this task, while enabling advisers to both deliver a higher quality service and also help more clients, has clear privacy implications – not least being the incidental disclosure of the client’s information to the AI provider.”^[12]

3. What will ASIC focus on in 2025?

On 14^th November 2024, ASIC unveiled^[13] details of its enforcement priorities for 2025. These priorities indicated the areas ASIC will direct its focus, expertise, and resources throughout the year.

Priorities most impacting advisers include:

• Misconduct exploiting superannuation savings.
• Unscrupulous property investment schemes.
• Failures by insurers to deal fairly and in good faith with customers.
• Licensee failures to have adequate cyber security protections.
• Greenwashing and misleading conduct involving ESG claims.
• Member services failures in the superannuation sector.

This list is notable as much for two items it no longer includes – poor distribution of financial products and compliance with the reportable situations regime.

Whether this suggests ASIC is now comfortable with compliance in these areas is unclear. Certainly, the latest breach reporting data, published by ASIC in October 2024, showed that while small licensees have shown improvement, ASIC believes there is still a degree of under-reporting^[14].

With Joe Longo telling an audience in November 2024 that he agreed the regime was too complicated¹⁵, it remains highly possible further changes – to simplify the regime – could be seen in 2025.

Summary

The financial advice regulatory big picture for 2025 remains crowded and complex. Several initiatives that will reshape advice are in play, although the timing and detail of some changes may not become clear until the second half of 2025, after the federal election.

While advisers must clearly prioritise compliance with the known changes already scheduled, an awareness of the big picture remains critical, to ensure key businesses decisions are made with the future in mind.

———–

References:
[1] https://www.superreview.com.au/news/financial-advice/industry-responds-dbfo-passage-following-controversy-over-s99fa
[2] https://www.ifa.com.au/news/34962-treasury-seeks-broad-consensus-on-fee-consent-forms
[3] https://asic.gov.au/about-asic/news-centre/news-items/asic-releases-new-and-updated-guidance-in-response-to-the-dbfo-act/
[4] Ibid.
[5] https://treasury.gov.au/publication/p2024-607305
[6] https://treasury.gov.au/sites/default/files/2024-12/p2024-607305.pdf
[7] https://www.afr.com/wealth/personal-finance/advice-reforms-to-be-legislated-by-may-next-year-stephen-jones-20241029-p5km4r
[8] https://www.moneymanagement.com.au/news/financial-planning/howarth-commits-implementing-dbfo-reforms-current-form
[9] https://www.twobirds.com/en/insights/2024/australia/australias-first-standalone-cyber-security-law-the-cyber-security-act-2024
[10] https://www.minterellison.com/articles/first-tranche-of-privacy-reforms-passed#:~:text=The%20Privacy%20and%20Other%20Legislation%20Amendment%20Bill%202024%20(Cth)%20(,Parliament%20on%2029%20November%202024.
[11] https://www.afr.com/politics/federal/small-business-wants-out-of-privacy-laws-as-data-breaches-rise-215pc-20241014-p5ki4b
[12] https://www.moneymanagement.com.au/news/financial-planning/fasea-lessons-future-privacy-reforms
[13] https://www.moneymanagement.com.au/news/financial-planning/which-priorities-have-fallen-asics-enforcement-list
[14] Ibid.
[15] https://www.moneymanagement.com.au/news/financial-planning/counterintuitive-effect-asics-reportable-situations-complexity

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Sarah Abood

Documents obtained by the Financial Advice Association Australia (FAAA) under Freedom of Information (FOI) reveal that an Impact Analysis into the Compensation Scheme of Last Resort (CSLR) – a process which requires consideration of the options, assessment of the benefits and costs, and consultation with stakeholders – was likely not undertaken. 

The heavily redacted documents were provided to the FAAA more than four months after being requested under the Freedom of Information act, despite the legislated timeframe to process a response being just 30 days.  

Sarah Abood, FAAA CEO, said the apparent lack of any Impact Analysis being conducted during the scheme’s development has led to substantial financial strains on the profession which should have been foreseen and could potentially have been avoided if a proper Impact Analysis had been undertaken. 

“There appears to have been no timely analysis done on the costs and benefits of the CSLR. Statements were made that the Hayne Royal Commission process was considered to be the equivalent of an Impact Analysis.  We believe that this decision is deeply flawed and inappropriate in the circumstances. The Royal Commission had a different purpose and was finalised over four years beforehand: well before the extent of the failings at Dixon Advisory were known and well before the legislation for the CSLR was considered by parliament. 

“There appears to have been no attempt to calculate the likely costs to advisers who are funding the scheme, or to assess whether these costs are affordable or sustainable, and the likely impact on the overall cost of advice to consumers.  

“This is deeply disappointing. We are calling for the government to acknowledge the scale of the exposure the financial advice profession faces and to undertake an urgently needed review of the CSLR legislation, to ensure that the CSLR is fairly and sustainably funded.” 

The FAAA has continued to investigate the circumstances surrounding the Dixon Advisory collapse and the way the CSLR was established. 

Last year the FAAA met with Minister Stephen Jones as well as Treasury to continue work on fixing the unintended consequences of the CSLR and has played a key role in securing a public inquiry into the failings of the scheme.     

“If the government is serious about ensuring the fairness and sustainability of the CSLR, it must act now to rectify the many flaws that have emerged since the scheme was established,” Ms Abood says. 

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Stephen Jones

The FAAA Congress will feature both the Hon Stephen Jones, Assistant Treasurer, minister for financial services, and the Hon Luke Howarth MP, shadow assistant treasurer and shadow minister for financial services, in a conversational and Q&A session moderated by the FAAA’s CEO Sarah Abood.

The session, “Powering Up the Politics”, will be held at 9.15am on Friday 29 November. It is an opportunity for both the minister and the shadow minister to update the profession on their views of how to address the challenges facing financial advisers.

It will be the first time both politicians have addressed the profession at the same time, and comes ahead of the Federal election which will likely be held in the first half of next year.

Ms Abood says the session will be an opportunity to hear how both political representatives plan to deal with pressing issues such as the rising cost of advice, falling numbers of advisers, and problems such as the Compensation Scheme of Last Resort (CSLR).

Under the theme “Power Up”, the FAAA Congress will be held in Brisbane from 27 to 29 November.

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Sarah Abood

The Financial Advice Association Australia (FAAA) has written to all federal members of parliament urging them to support a public inquiry into the collapse of Dixon Advisory and the effect it has had on the Compensation Scheme of Last Resort (CSLR). 

The call for a public inquiry comes in response to significant concerns regarding the treatment of Dixon Advisory’s collapse, which left thousands of clients with losses potentially up to $400 million due to breaches of the best interests duty by Dixon Advisory and the failure of a related party product known as the URF (US Masters Residential Property Fund). 

As much as $135 million of this compensation bill could be charged to the financial advice profession, potentially costing all financial advisers more than $8,000 each, and resulting in further increases to the already high cost of financial advice. 

Sarah Abood, CEO for the FAAA, says the association has commenced working with Treasury with the goal to fix some of the issues that have become apparent since the scheme’s inception. 

“However, it is essential that we learn the full extent of the issues behind the multi-hundred-million-dollar Dixon Advisory scandal, to ensure it is not repeated. 

“A public inquiry would provide clarity around the key questions that remain unanswered, including how the money was lost in the Dixon Advisory scheme, what role directors and senior management played, and why ASIC failed to adequately investigate and take action in a timely way, despite numerous complaints from as early as 2008.” 

“There are too many unanswered questions about the collapse of Dixon Advisory and the subsequent impacts on their clients and the advice profession,” Phil Anderson, general manager of policy, advocacy and standards said. 

“It is crucial that we understand why the fallout from this scandal has focused primarily on financial advisers while leaving the business leaders and their investment product, as well as broader systemic issues and the firm’s questionable business model, unaddressed.”  

Building on recent advocacy for a fairer scheme, the FAAA met with Minister Stephen Jones in August to raise key concerns regarding the CSLR, including the total cost of the scheme, and whether it is operating as a true last resort.  

“The financial advice profession is made up of small business owners, and 92 per cent of advice practices have five or fewer advisers. Our sector simply can’t afford to underwrite the malpractice of large, listed companies, and nor should we,” Ms Abood said. 

“This was supposed to be a last resort scheme to compensate Australians who were the victims of poor or negligent financial advice, when all other avenues of restitution had failed. Instead, in the absence of true accountability for those responsible, it’s become a scheme of first resort for the many Australians that were caught up in the Dixon Advisory scandal.

“We owe it to consumers to ensure that the CSLR is fairly and sustainably funded. A public inquiry into what happened at Dixon Advisory is critical, so we can learn the lessons of this failure and ensure it can never happen again.” 

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Mike Lawrence

The Customer Owned Banking Association (COBA) and its members are pleased to welcome the Government’s decision to introduce a Financial Sector Regulatory Initiatives Grid following extensive advocacy by COBA.

In yesterday’s announcement, Treasurer Jim Chalmers and Minister for Financial Services Stephen Jones formally thanked COBA for its work in helping shape the reform. The Regulatory Grid will bring major financial services regulators together to schedule regulatory change, creating benefits across the whole financial services sector including greater transparency and the ability to better plan and allocate resources.

COBA CEO Mike Lawrence said: “We are delighted to see the Government press ahead with an Australian Financial Sector Initiatives Regulatory Grid. This will allow customer-owned banks to better forecast staffing and resource requirements, plan for regulatory change, and better compete with larger banks. We all know that a competitive banking market benefits all Australians and creates a more dynamic finance industry.”

As part of a submission on behalf of COBA’s 55 members to the House of Representatives Standing Committee on Economics inquiry into promoting economic dynamism, competition and business formation, COBA highlighted the challenges customer-owned banks must navigate in the face of increasing regulatory requirements, with smaller banking institutions finding it more difficult and expensive to navigate a fragmented and uncoordinated regulatory landscape.

“The relatively small size of some customer-owned banks compared to their shareholder-owned counterparts makes it harder to keep up with the tsunami of regulatory change we are seeing in the financial services sector.  This impacts their ability to compete and is key to why we have been advocating for this initiative for a number of years. We look forward to working with the Government on the design to make sure that the Regulatory Grid delivers productivity, transparency, and accountability benefits,” Mr Lawrence said.

“Significant regulatory change will continue as the risk environment becomes more complex and dynamic. The introduction of a Regulatory Grid means better coordination and mapping of regulation, which will help banks and credit unions manage this burden and maintain critical investments in customer-focused initiatives,” he added.

COBA looks forward to further discussions and collaboration with the Government and regulators to ensure the customer-owned banking sector can thrive, providing increased competition and strong, innovative banking solutions for consumers in Australia.

Mike Lawrence said: “The customer-owned sector is essential to keeping Australian banking competitive, and ensuring customers have options when it comes to first-class service and products. COBA will continue to advocate for more recognition of the customer-owned banking sector overall, and the diversity of banking business models.”

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Stephen Jones

Global Wealth & Advice Tech company GBST welcomes the Government’s commitment to making financial advice more accessible and affordable for millions of Australians, as part of the ‘Delivering Better Financial Outcomes” roadmap, that was presented in parliament last week to an audience that included GBST.

In response to Recommendation 6 of the Quality of Advice Review (QAR), the Government intends to introduce a comprehensive framework for expanding superannuation advice by legislating consistent rules on what advice topics can be paid for via superannuation; allowing super funds to consider a broader range of a member’s personal and household circumstances; and supporting increased member engagement at key decision points in the retirement income journey.

With over five million Australians approaching retirement, and only 16,000 professional financial advisers, many consumers simply cannot access affordable advice. Digital advice will play an important role in improving accessibility and affordability given “the numbers don’t work”, said The Hon Stephen Jones MP.

“Now is the time to be having these important conversations about the future of financial advice”, says Rob DeDominicis, CEO of GBST. “Superannuation funds, life and general insurers, and banks, all have the opportunity to embed digital technology tools into their advice services.”

“Technology is a critical component in granting Australians individualised and affordable financial advice at scale – super funds are Australia’s main distribution channel to achieve this”, says Jacqui Henderson, GBST’s Head of Advice Solutions – Business Development. “The announcement of this framework is a step forward in reducing the barriers that are holding super funds back from providing members with the financial advice services they want and need.”

By providing members with access to a simple, in-platform digital advice tool like GBST’s Advice Intelligence software, super fund members can build a stronger financial future, and super funds can deliver investment and retirement strategies that would otherwise be inaccessible and unaffordable for many.

“Digital advice technology gives consumers access to helpful advice at a time and place that suits them. For those wanting additional human support, this is also available as part of the digital advice process through hybrid services,” noted Henderson.

The Government has promised to make financial advice easier to access when Australians need it – GBST’s innovative digital advice technology supports the pursuit of enabling everyday Australians to build a better financial future.

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Sarah Abood

The inaugural Financial Advice Association Australia (FAAA) Congress will give financial advisers the opportunity to gain valuable insights into the many changes currently taking place in the financial planning profession.

Under the theme “Grow together”, the FAAA Congress will be held in Adelaide from 20 to 22 November and will include the first FAAA Awards Gala Dinner on Tuesday 21 November, recognising and celebrating members who deliver the highest standards of professional and trusted advice to Australian consumers, as well as those who are going above and beyond to support their local communities.

FAAA chief executive Sarah Abood says advisers at the Congress will have the opportunity to collaborate with their peers and gain knowledge to help succeed in today’s rapidly evolving financial services landscape.

“The FAAA Congress offers a platform for advisers to exchange ideas, insights and knowledge over three days, in the largest national event in the calendar for the advice profession,” Ms Abood says.

“In the keynote session, attendees will hear from former Time Magazine editor William Green, who has plenty of insights gained over his 25-year career interviewing the world’s most successful investors.

“There is also a packed schedule of presentations from experts in their fields as well as interactive sessions and networking opportunities that will inspire attendees to take their practise to the next level.”

FAAA chair David Sharpe says advisers attending the FAAA Congress will leave the event more confident about running their practice in a time of constant regulatory and technological change.

“The content has been carefully curated by members for members, with many sessions accredited for CPD points across the range of legislated CPD areas,” Mr Sharpe says.

“In line with this year’s theme, we will ‘grow together’ as advisers, navigate the profession’s challenges, seize opportunities, and inspire one another to reach new heights.”

As well as the keynote session from William Green of Time Magazine, other sessions of note include:

• Assistant Treasurer and Minister for Financial Services Stephen Jones will be joining us to outline the latest government views and regulatory developments in the advice area, with a particular focus on the status of the Quality of Advice Review reforms.
• A plenary session on the inevitable growth of artificial intelligence (AI) in the advice profession, featuring futurist Ross Dawson, CEO of Advice Intelligence Jacqui Henderson, Financial Planning Standards Board chief executive Dante De Gori CFP®, and expert in AI tools Laurel Papworth.
• The closing plenary featuring ultra extreme open water and ice swimmer adventurer Ryan Stramrood, who will present.
• PushPastImpossible: including insights on mindset, goal setting, believing in yourself and the power of determination.
• An update on the policy and advocacy objectives from the FAAA’s Phil Anderson and George John.

Breakout sessions will include:

• Engaging and enriching client relationships.
• Growing the next generation of financial advisers.
• The blueprint for the successful advice firm.
• Strengthening standards for the global profession.
• Applying digital advice in practice.
• Hottest topics and latest info in SMSFs
• The future of risk advice following the Quali.ty of Advice Review ​.
• The ethics of risk profiling.
• De-risking client financial decision making in estate planning​

The CFP® Professional Connect specialist workshop will make a return this year, on Monday morning before the FAAA Congress kicks off, providing exceptionally high-quality technical content in a session hosted by a panel of leading CFP® professionals and subject matter experts.

There will be a number of pre-Congress sessions during the afternoon before the official opening on Monday 20 November, including the Gen Next Session for paraplanners, emerging professionals and students, and the FAAA Professional Practice Session, focused on succession planning and how to retain key people.

A networking welcome reception will be held on the evening of Monday 20 November following the first keynote session, and the Inspire breakfast on Tuesday morning features sustainable fashion expert Natalie Shehata, discussing how we can use the medium of clothing to express ourselves unapologetically through conscious styling.

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Stephen Jones

Advisers heard directly from the Assistant Treasurer and Minister for Financial Services Stephen Jones, and had the opportunity to ask questions of the minister, at a series of open industry events in Queensland co-hosted by six associations from the Joint Associations Working Group (JAWG).

Following the earlier event in Hobart on 27 June, this latest series of events was held across three days in Brisbane on 11 July, Townsville on 12 July, and Cairns on 13 July.

Coming together to host the events were the CAANZ, CPA, FAAA, FSC, IPA and SIAA.

Moderated by representatives from the partner associations, Minister Jones spoke about the government’s response to the Quality of Advice Review and took questions from financial advisers and other financial services participants from the floor.

QAR consultation

Regarding the Government’s consultation on its response to the recommendations of the Quality of Advice Review, attendees were keen to understand how quickly the Stream 1 measures to reduce red tape could take effect.

FAAA CEO, Sarah Abood says: “This first package of reforms is critical in helping advisers deliver more great advice for Australian consumers. The government and Treasury are moving swiftly to implement these measures, and the minister clearly stated his goal for draft legislation to be available this calendar year.

“Of the Stream 1 measures, most questions were asked about the Statement of Advice proposals, and in particular how the industry could gain sufficient confidence in delivering more fit-for-purpose advice records for consumers.

“The minister also said he wants to ensure that the legislation is not too prescriptive. He and his team are very aware of the need to involve all stakeholders early, including licensees and the regulator, in designing a solution that will achieve the goals,” Ms Abood says.

“Many questions were also asked about the Stream 2 reforms and how the government envisages that superannuation funds will deliver a potentially broader advice offering to members via non-relevant providers.

“The minister said that he sees transition to retirement advice as an area of high unmet need and a priority to solve. He has heard loud and clear some of the concerns and need for safeguards around the complexity of this advice, the qualifications of those delivering it and the impacts of collective charging. He has said he is open to views on these matters and they will be front and centre in the next stage of consultation on this stream of reforms.”

Education and increasing adviser numbers

Ms Abood says many questions related to the urgency of rebuilding adviser numbers and the severe skill shortage in the profession.

“Discussion also touched on the experience pathway legislation now in parliament, which the minister is hopeful will assist. There were questions around education requirements more broadly, in the context of specialisations, and recognition of the differences between advisers focused in areas such as personal risk or stockbroking, versus those providing holistic/comprehensive advice.

“Members spoke to their own different pathways into the profession and the need for support for different types and stages of new entrant. The government will commence another piece of work soon which will address these matters in more detail.”

Better access to data

Attendees also asked questions around allowing better access for advisers through the Australian Taxation Office (ATO) portal and via Centrelink, to enable them to serve clients more efficiently.

“Of course, facilitating this access would also reduce costs for government,” says Ms Abood.

“Minister Jones has carriage of the Consumer Data Right and is known as the ‘digital minister’ for having moved to paperless in his own office. So he definitely has a strong understanding of the need in this area, and the potential benefits in efficiency and lower costs that could be achieved.

“We have also separately spoken about the potential for efficiencies in areas such as Anti-Money Laundering and Counter-Terrorism Finance Act (AML/CTF) reporting obligations, in moving to digital identity verification. We are hearing strong support for digital solutions from the government, and we will shortly be asking members for help in building the case to go to the next stage on these priority areas.”

ASIC levy

Finally, many attendees raised questions about the fairness of the recently-announced steep increase in the ASIC levy, now the freeze has ended.

“It just doesn’t make sense to see the per-adviser ASIC levy almost tripling, at a time when the number of advisers has almost halved, and we are trying to reduce the cost of advice for consumers,” Ms Abood says.

“This issue was proactively raised by attendees at every event, and the minister has now heard the concerns very clearly directly from those most affected. We continue to engage intensively on this matter, as we believe that even under the current Industry Funding Model (which we know has flaws), there could be ASIC costs that have been incorrectly attributed to our sector.

“Overall, attendees have told us they’ve found these events to be extremely valuable as an opportunity to engage directly with the minister. We are very grateful for the considerable time he has given at these events, being willing to take questions directly from the floor and have a full, frank and engaging discussion about the issues that matter most in our profession.”

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Andrew Maple-Brown

Maple-Brown Abbott welcomes Treasury’s decision to adjust the Australian and international listed infrastructure APRA performance benchmark^[1], agreeing that the adjusted benchmark better represents the asset class and provides superannuation funds with greater choice to invest in listed infrastructure assets, to the benefit of their members.

The decision was recently announced by The Hon Stephen Jones MP, Assistant Treasurer and Minister for Financial Services, following submissions from Maple-Brown Abbott and other industry participants.

Andrew Maple-Brown, co-founder and managing director, Maple-Brown Abbott Global Listed Infrastructure, said the adjusted benchmark – the FTSE Developed Core Infrastructure 50/50 100% Hedged to AUD Net Tax (Super) Index – has weightings much more representative of the asset class on both a geographic and sector basis

For example, the North American exposure is reduced from 82% to 65% and the exposure to transportation infrastructure (excluding railroads) increases from 3% to 23%.

“The adjusted APRA benchmark better facilitates a more balanced exposure to listed infrastructure, and should help encourage super funds to invest in listed infrastructure assets in Australia and overseas,” Mr Maple-Brown said.

“The need to outperform the existing benchmark has served to concentrate portfolios towards unlisted assets. In our opinion this was unnecessarily restricting super funds from being able to access the attractive benefits of listed infrastructure,” he said.

Steven Kempler, co-founder and portfolio manager, Maple-Brown Abbott Global Listed Infrastructure, said the benchmark change is particularly pertinent given the significantly discounted valuations of listed infrastructure assets relative to private infrastructure assets.

“We believe listed infrastructure is trading materially cheaper than private infrastructure. We recently authored a white paper which explains the significant valuation gap between listed infrastructure and private infrastructure, and the implications for investors.

“The benchmark adjustment comes at an opportune time. It better facilitates super funds accessing quality infrastructure assets at relatively attractive prices, managed by high performing listed infrastructure managers, within which Australian managers are globally recognised as leading performers.

“The liquidity available to funds by having a portion of their infrastructure exposure allocated to liquid assets is particularly attractive. This has gained increased attention since the UK pension liquidity crisis in 2022,” Mr Kempler said.

Mr Maple-Brown said: “We believe the adjustment will have positive implications for asset allocators benchmarking within this asset class and ultimately all Australian superannuation holders that have an exposure to listed infrastructure. For these reasons we applaud the prompt action taken by Treasury which provides greater opportunities for super funds and their members.”

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[1] https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/raising-bar-superannuation-performance-test-update-2023

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