Senate committee hands down DBFO bill report

Speaking at an event on Thursday morning, Financial Advice Association Australia (FAAA) general manager policy, advocacy and standards Phil Anderson, said he did not expect last week’s Senate economics hearing to have an impact on how the government views the DBFO bill.

While the government recently amended the bill’s explanatory memorandum (EM) to clarify that trustees are not expected to rigorously review each statement of advice (SOA), professionals and legal experts argue that these changes to the EM are insufficient and that the legislation itself needs to be amended.

Also on Thursday, shadow treasurer Angus Taylor and shadow financial services minister Luke Howarth addressed a letter to Financial Services Minister Stephen Jones to demand section 99FA be removed from the first DBFO bill.

“As witnesses from ASFA, the Financial Advice Association of Australia, the Law Council of Australia and the Financial Services Council indicated to the committee there is a significant discrepancy between what the government says the intent of this clause is, and what industry say its impacts will be,” the joint letter said.

“In the words of the FAAA, this clause ‘threatens the financial wellbeing of Australians’ and ‘add[s] nothing but confusion, uncertainty and cost.’ In the words of the Financial Services Council, this clause fails ‘to achieve the common policy objective of more affordable and accessible advice’ and will ‘put an unacceptable legal burden on trustees’ and ‘an unacceptable regulatory cost on advice businesses.’

“The Coalition therefore recommends that the Government remove section 99FA in division 1 of Schedule 1 from the Bill. We will support the Bill should this change be made and work with the Government to facilitate its speedy passage through the Senate and the House.”

ifa understands that the Coalition wants to see s99FA re-consulted on by the Treasury ahead of the government’s legislation implementing the second tranche of Quality of Advice Review recommendations.

In the Coalition Senators' dissenting report, they affirmed this view.

"By removing Section 99FA in Division 1 of Schedule 1 from the Bill, speedy passage of the rest of the Bill through the Senate and the House can be facilitated," it said.

The dissenting view added the recommendation: "That Part 1 Schedule 1 of the Bill be removed and the provisions re-consulted on by the Treasury in anticipation of Tranche 2 of the Government’s legislation implementing the Quality of Advice review recommendations."