Industry bodies have generally welcomed the government’s announcement of a package of reforms to strengthen consumer protections, although the FAAA says it’s disappointed the new class of adviser will be limited to select large institutions.
In responding to Minister for Financial Services Daniel Mulino’s National Press Club address yesterday, the FAAA’s CEO, Sarah Abood, says improving access to simple, affordable advice is essential to help Australians understand complex financial products and make informed decisions.
“As such, we are disappointed that the new class of adviser will be limited to select large institutions. Consumers need choice in how they access this simpler, lower-cost form of advice. It should be an option for financial advice practices to allow them to help more Australians.” (See: New Class of Adviser Limited to Life Insurers and Superfunds).
She says the FAAA will hold the government to account on its commitment to ensure the NCA does not encroach on the type of work financial advisers do.
“We welcome the Minister’s scaled advice changes and ongoing commitment to prioritise reform of new financial adviser education standards.”
Abood said Mulino’s address included welcome progress on the response to Shield and First Guardian events. “While some of the reforms announced by Minister Mulino will help achieve the stated aims, we are concerned that others may limit the ability of financial advisers to help Australians manage their finances and plan for their retirement.”
…we are concerned the proposed anti-hawking exemption changes could affect advisers’ ability to support clients…
She also welcomed the action to crack down on unlicensed lead generation “…however, we are concerned the proposed anti-hawking exemption changes could affect advisers’ ability to support clients and their families, particularly during critical life events.”
On the CSLR reforms, Abood says the FAAA is pleased the Minister has acknowledged the concerns it has raised with him about the impact of ongoing levies on advisers “…however at this stage he has not specified a figure for the 2026/27 special levy which is critical for members.”
Australians should be able to ask their life insurer a simple question and get a simple answer…
CALI Welcomes New Class of Adviser
Another industry body, the Council of Australian Life Insurers, welcomed the decision to proceed with introducing the new class of adviser for life insurers and APRA-regulated superannuation funds, alongside wider the reforms to make advice simpler and more accessible.
CEO Christine Cupitt says Mulino’s announcement was an important step towards closing Australia’s growing advice gap. “Australians should be able to ask their life insurer a simple question and get a simple answer.”
“The new class of adviser will complement the vital work of professional financial advisers by giving Australians more choice about where and how they get help with straightforward questions.”
Cupitt said Australia’s life insurers are well placed to deliver the simple advice Australians have been asking for and the new class of adviser enables.
“After three years of promised action, the Government must give a clear timetable for the introduction of legislation as soon as possible.”
The Financial Services Council response
The Financial Services Council also welcomed the reform package, pointing to the Minister’s renewed commitment to progressing Tranche 2 of the Delivering Better Financial Outcomes reforms.
We look forward to working with the Government on getting the details right…
“We look forward to working with the Government on getting the details right. Australians’ financial wellbeing will be enhanced by having more access to information from financial institutions where their circumstances and queries are simple, through to full financial advice from licensed professional advisers where they are looking for advice on what to do with their full financial affairs,” CEO Blake Briggs says.
“Pleasingly, the Government is already making progress on streamlining adviser education standards, which will be critical to increasing the number of advisers in the market…”
On the CSLR Briggs said the FSC is encouraged by the Government’s plan to make changes to the design of the CSLR, including limiting CSLR compensation to capital losses.
the reforms recognise the important role life insurers can play in helping customers better understand their cover…
Making it Easier for Australians to Access Support
Meanwhile, insurer TAL also welcomed the government’s commitment to reforms with Group CEO and MD Fiona Macgregor saying the reforms recognise the important role life insurers can play in helping customers better understand their cover and their options.
“Alongside the important work of financial advisers, we’re pleased to see steps that will make it easier for Australians to access the support they need to make informed decisions…” she says.
Victims Will Lose Out
Consumer advocacy group, CHOICE says that victims will lose out under the CSLR change.
Morgan Campbell, Head of Policy, says that while CHOICE is glad to see the Government take steps to address some of the underlying causes of the Shield and First Guardian collapses it “strongly opposes” Mulino’s proposal to limit the scope of compensation payable under the CSLR.
