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Government reforms aim for simple guidance at scale without “unnecessary red tape”.
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Jones creates fee-free adviser category for banks, super funds
07 December 2023
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The government will create a new class of financial advisers to deliver guidance on straightforward matters free from charges or commission “to ensure Australians have access to quality and affordable financial advice when they need it most”.
To be called “qualified advisers”, they would be employees of licensed financial institutions such as superannuation funds, insurers and banks, which would be responsible for the advice provided.
Assistant Treasurer Stephen Jones said a shortage of professional advisers had exposed consumers to unregulated guidance on social media and the reforms delivered on a government promise to make financial advice easier to access.
“With 5 million Aussies at or approaching retirement with more money than ever before, these reforms will help people make informed and safe financial decisions,” he said.
“This new access to financial advice will reduce the harm caused by scammers posing as ‘fin‑fluencers’, with investment scams representing over 60 per cent of all scam losses so far this year.
“Access to good advice can be key to helping Australians manage cost of living pressures.”
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All qualified advisers would be subject to the same standards under a modernised best interests duty so that consumers could have confidence in the expanded system.
But the government was committed to reducing “unnecessary red tape that doesn’t add a consumer benefit and is making professional financial advice costly”.
The Assistant Treasurer’s statement said the result would be “simple advice at scale that will be high quality, helpful and safe for consumers”.
The revised model would:
“Modernise the best interests duty to ensure customers receive helpful advice, including on single issue or limited scope issues, at a high standard.
“Replace statements of advice with a record that is in plain English and provides helpful information to make an informed decision.
“Introduce a new class of financial advisers who can provide advice on simple topics, while being subject to the modernised best interests duty.”
The revisions would recognise the “unique obligations on superannuation funds” and clarify topics on which they could charge for advice and the circumstances they could consider.
It would also allow super funds to provide “nudges” to members to drive greater engagement with superannuation at key life stages.
Legislation would be developed to implement the model next year.
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