The government has released the first consultation on its Delivering Better Financial Outcomes reforms.
Following the Quality of Advice Review (QAR), the first tranche of legislation announced on 14 November aims to cut onerous red tape that adds to the cost of advice with no benefit to consumers.
Half of the QAR recommendations have been adopted including Recommendation 7 on superannuation fees.
This recommends “clarifying the legal basis for superannuation trustees paying a member’s financial advice fees from their superannuation account and associated tax consequences”.
Meanwhile Recommendation 13.2 stated “introducing a specific exception to the conflicted remuneration provisions that permits a superannuation fund trustee to pay a fee for personal advice where the client requests the trustee to pay the fee from their superannuation account.”
Consultation is open until 6 December via email and post.
Last week, Vanguard Super announced that it will be introducing the ability for members to pay advice fees via a deduction from their SaveSmart accounts, effective 6 December 2023.
With written consent, members can agree that personal advice provided by a licensed financial adviser registered with Vanguard, relating to the SaveSmart account, can be paid via a deduction from the account.
The payment of advice fees will also be subject to certain limits, such as a minimum balance of $25,000 at the time of deduction and that the advice fee payable cannot be over 2 per cent of the account balance at the time of deduction.
Vanguard also capped the total amount of advice fees deducted each financial year at $6,000, inclusive of GST.
The remaining recommendations included in the legislation were:
The first Delivering Better Financial Outcomes bill passed the Senate on Thursday afternoon before sailing through the House of Representatives a few hours later as a matter of formality.
Minister Stephen Jones has made amendments to the first Delivering Better Financial Outcomes (DBFO) bill, giving superannuation trustees greater legal certainty.
The SMC has come under fire over the past week following a statement in which its CEO referred to advisers as “dodgy”.
Super funds are ramping up their financial advice offerings, with ART confirming it is already on the path to implementing a new single intra-fund advice program.
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