Assistant Treasurer and Minister for Financial Services Daniel Mulino has confirmed the government will proceed with the new class of adviser, but this will be limited initially to life insurers and APRA-regulated superannuation funds.
In an address to the National Press Club Mulino outlined a package of reforms designed to strengthen consumer protections and build the resilience of the Australian superannuation and financial system, informed to a significant extent by the collapse of the Shield and First Guardian masterfunds.
He said the new class of adviser would be “…supported by strong safeguards against vertical integration through prohibitions on commissions, bonuses and volume-based payments.”
We will review the scope of the new class of adviser in three years to determine… whether we should expand it further…
“We will review the scope of the new class of adviser in three years to determine how it is performing and whether we should expand it further.”
He also said that in the wider advice sector, the government will deliver targeted reforms to the best interest duty to enable the provision of scaled advice.
“And we will also progress a review of the adviser code of ethics to ensure it is fit for purpose. This reform recognises a simple reality: millions of Australians need help navigating an increasingly complex retirement system, and there should be accessible and affordable ways for them to receive that help.”
He noted that the government has already announced reforms to adviser education standards to support new entrants to the profession and to strengthen the long-term sustainability of financial advice.
“And I will continue to act on this as a real priority.”
Mulino said another pillar of the package he was announcing was ensuring the Compensation Scheme of Last Resort “…is on a firmer and fairer footing for the future,” describing CSLR as “…an important safeguard within our financial system and an important protection for consumers.”
He noted however that the CSLR was not designed to absorb the costs associated with large-scale investment losses linked to personal advice failures.
“I am also announcing that in 2026-27 the government will apply the waterfall model outlined in consultation to the $170.3 million special levy attributed to the financial advice subsector.”
But applying the waterfall model “…doesn’t mean that subsectors are automatically going to pay their maximum cap. The legislation requires me to consider the viability of affected sectors and the broader interests of the financial system. And that is exactly what Treasury is analysing now, in consultation with stakeholders, before I make any final decision.”
Mulino said that in particular, he recognises that financial advice is a sector made up largely of small businesses.
…I am committed to working with the sector to ensure that we arrive at an outcome that is sustainable, proportionate and fit for purpose…
“I want advisers to know that I recognise the immense value they provide to Australians. I have heard the concerns that they have raised throughout this process and I am committed to working with the sector to ensure that we arrive at an outcome that is sustainable, proportionate and fit-for-purpose.”
He said the government “…recognises the significant impact that these levies have across the financial system. We recognise that consumers need access to a compensation framework that is fair, effective and reliable. We will also ensure that SMSFs contribute to special levies in future years where a special levy is required.”
Click here to see a Treasury fact sheet on the reforms announced.
