Treasury has released the first package of draft legislation in response to the recommendations of the Quality of Advice Review. Background.

The package includes amendments that will provide legal certainty for the payment of adviser fees from a member’s superannuation fund account and remove red tape that adds to the cost of advice with no benefit to consumers.

The draft legislation responds to several recommendations of the Quality of Advice Review, including:

• Recommendation 7: clarifying the legal basis for superannuation trustees reimbursing a member’s financial advice fees from their superannuation account, and associated tax consequences;
• Recommendation 8: streamlining ongoing fee renewal and consent requirements and removing the requirement to provide a fee disclosure statement;
• Recommendation 10: providing more flexibility on how FSG requirements can be met;
• Simplifying and clarifying the provisions governing conflicted remuneration, including:
  Recommendations 13.1 and 13.3: clarifying that monetary or non-monetary benefits given by a client are not conflicted remuneration along with the removal of consequential exceptions;
  Recommendation 13.4: removing the exception to conflicted remuneration rules for the issue of financial products where advice has not been provided in the previous 12 months;
  Recommendation 13.5: removing the exception to conflicted remuneration rules for agents or employees of Australian Authorised Deposit-Taking Institutions (ADIs); and
  Recommendation 13.2: 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.
• Recommendations 13.7 to 13.9: introducing new standardised consent requirements for life risk insurance, general insurance and consumer credit insurance commissions.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.