Jones addresses uproar around section 99fa

Speaking to ifa on the sidelines of an event in Sydney, the Financial Services Minister said proposed changes to section 99fa of the SIS Act do not attempt to change arrangements currently in place.

“All we are attempting to do is ensure that the law confirms the status quo. That’s what we’re trying to do,” Jones said.

“[We're not trying to] change any arrangements that are currently in place. Levy’s review said current practice was not supported by the law, so we said, ‘OK, let’s sort that’.”

Jones also confirmed that if needed, the government would “sort through some of the details”, hinting at the possibility of responding to industry pressure by including assurances directly in the legislation rather than relying solely on the explanatory memorandum.

Namely, the advice profession recently learnt that the government had amended the explanatory memorandum (EM) of the Delivering Better Financial Outcomes Bill to clarify that it does not require a rigorous review of each statement of advice (SOA). Despite this, the profession and legal experts have argued that changes to the EM are not adequate and that the legislation itself needs to be amended.

But Jones clarified on Tuesday that while sorting out details is a possibility, he doesn’t want it to be a “distraction from the main game”.

“The main game is getting on to the second tranche of reforms,” he said.

Moreover, the minister again confirmed that he does not expect superannuation trustees to check every single piece of advice documentation.

“They won’t have to check the individual statement of advice, they’ll put in a risk-based approach, as they are supposed to today. They should be continuing the process they have in place today.”

While the advice profession is broadly supportive of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024, it has expressed fierce opposition to a reworked section 99fa of the SIS Act, arguing that it would only exasperate the red tape and therefore the cost of advice.

The changes proposed in the bill, as interpreted by the profession and some members of the legal profession, suggest that funds need to review clients’ SOAs before they can satisfy members’ requests for payment of advice.