Jones says further legislation to implement QAR will be ready in 2024

The long-awaited bill to enshrine some of the recommendations of the Quality of Advice Review (QAR) was introduced to Parliament on Wednesday.

In a statement issued to accompany the legislation, Financial Services Minister Stephen Jones said the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 implements reforms which “reduce unnecessary red tape that adds to the time and cost of preparing financial advice”.

“The legislation streamlines the delivery of financial advice by consolidating fee documents for ongoing fee arrangements into one simplified document and allows more flexibility in how financial services guides are provided,” Minister Jones said.

He praised the legislation for simplifying the rules for conflicted remuneration, by making clear that benefits paid by clients, including from their superannuation accounts, are not conflicted remuneration. Moreover, Jones said the legislation strengthens transparency and protections for consumers who receive personal advice by introducing a consent requirement before purchasing an insurance product that will result in a commission payment.

“The amendments will also support Australians to access the advice they need to achieve a dignified retirement by making clear in the law that Australians can use their superannuation accounts to pay for financial advice about their superannuation,” the minister said.

“It does not expand the scope of fees which can be charged to superannuation accounts,” he added, highlighting that over 5 million Australians, at or approaching retirement, need assistance to navigate the pension and superannuation systems.

The minister also confirmed the remaining elements of the Delivering Better Financial Outcomes will be developed in 2024.

The recommendations included in the initial bill are:

• Recommendation 7 – Clarifying the legal basis for superannuation trustees paying a member’s financial advice fees from their superannuation account, and associated tax consequences.
• Recommendation 8 – Streamlining ongoing fee renewal and consent requirements, including removing the requirement to provide a fee disclosure statement.
• Recommendation 10 – Allowing more flexibility in how financial services guides are provided.
• Simplifying and clarifying the provisions governing conflicted remuneration in the Corporations Act (Part 4 of Schedule 1), including:
  • Recommendations 13.1 and 13.3 – Clarifying that monetary or non-monetary benefits given by a client are not conflicted remuneration along with the removal of consequential exceptions.
  • Recommendation 13.2 – Introducing a specific exception to the conflicted remuneration provisions that permits a superannuation fund trustee to pay a fee for personal advice where the member requests the trustee to pay the fee from their superannuation account.
  • Recommendation 13.4 – Removing the exception to conflicted remuneration rules for the issue of financial products where advice has not been provided in the previous 12 months.
  • Recommendation 13.5 – Removing the exception to conflicted remuneration rules for agents or employees of Australian ADIs.
• Recommendations 13.7 to 13.9 – Introducing new standardised consent requirements for life risk insurance, general insurance, and consumer credit insurance commissions.