Calls Intensify for Swift Financial Advice Reforms in Australia
Calls Intensify for Swift Financial Advice Reforms in Australia
20
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Amid pressing concerns from industry associations, the call for rapid finalization of financial advice reforms in Australia has been amplified.
The lack of direction from the Labour government regarding the Compensation Scheme of Last Resort (CSLR) is causing uncertainty in the sector, potentially stalling essential reform work.
The impending retirement of Stephen Jones has only added to the speculation surrounding the future of these reforms.
According to Sarah Abood, CEO of the Financial Advice Association Australia, there is an urgent need for a cap on the CSLR advice levy and a more equitable funding model. Failure to address these issues places an undue financial burden on advisers, due to product failures. Despite the Labour government's successful passage of CSLR legislation in 2023, a Treasury review has been triggered due to the notable increases in levies for the financial advice sector, raising questions about the scheme's sustainability.
As the FY26 levy is projected to reach $70 million, climbing to $123 million by FY27, concerns over funding 'but for' AFCA determinations, where tangible capital loss is absent, remain a hot topic. Stakeholder recommendations are expected to address this issue, with suggestions for excluding such claims from CSLR likely to gain traction.
Stephen Jones' departure has also left the government’s response to the Quality of Advice Review unfinished. Key elements, like the creation of a new adviser class and the removal of safe harbour steps, remain unresolved. Associations like the Financial Services Council and the Stockbrokers and Investment Advisers Association are urging the government to finalise reforms swiftly to improve access to affordable financial advice.
The implications for consumers and the broader financial services industry are significant. Unresolved advice reforms could hinder access to affordable financial advice, critical for millions of Australians, especially those planning for retirement. Complex regulations also pose challenges; simplifying these could make financial advice more accessible and cost-effective.
Sectors like superannuation are watching keenly as these reforms affect their ability to deliver on their promises of guidance and affordable advice. Both associations and industry leaders emphasize that clarifying these reforms is crucial to support growth and reduce costs, facilitating better consumer outcomes.
Looking forward, there is an anticipation of collaboration between industry bodies and the Albanese government to finalize unresolved issues. Sarah Abood has called for the removal of unnecessary red tape and the introduction of standardised documentation, ensuring advisers can focus on client outcomes rather than regulatory compliance.
Furthermore, as the Super Members Council (SMC) has solidified its stance against compromising superannuation policies for housing initiatives, pressure mounts on the government to maintain the integrity of super contributions. The role of super funds in providing large-scale, profitable housing solutions remains a focal point for the upcoming legislative discussions.
With incoming changes in governmental roles, stakeholder cooperation will be critical in refining these policies to ensure they meet the needs of a complex and evolving financial landscape.
Published:Tuesday, 6th May 2025 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
In recent years, Australian small and medium-sized enterprises (SMEs) have increasingly turned to non-bank lenders for their financing needs. This trend reflects a significant shift in the financial landscape, with over 50% of SMEs now preferring alternative lending sources over traditional banks. - read more
The Australian Securities and Investments Commission (ASIC) has recently highlighted the need for enhanced regulatory measures within the nation's private lending sector. This call to action stems from findings that reveal inconsistencies and potential risks that could adversely affect both investors and borrowers. - read more
Alternative lending refers to financial services provided by non-bank institutions. These lenders offer various financing options to individuals and businesses who may find it challenging to secure loans from traditional banks. - read more
Embarking on a startup journey is an exhilarating challenge that requires not just a brilliant idea, but a solid foundation of financial support to turn that idea into reality. Finding the right funding can be a make-or-break moment for many startups. Here, preparation is more than just a good practice; it's the backbone of any successful loan application. - read more
Need Help Finding a Loan?
All finance quotes are provided free (via our secure server) and without obligation. We
respect your
privacy.
Knowledgebase
Tax Deferral: A situation where a taxpayer is allowed to delay paying taxes on income until a future date, commonly seen in retirement accounts.
