Don’t hold your breath on ALRC’s advice legislation reform
Before anyone gets too excited by the Australian Law Reform Commission’s (ALRC’s) final report into the Reforming Corporations and Financial Services Legislation they should consider just how long it took to get this far.
They should then consider just how long it is likely to take before the Albanese Federal Government actually focuses on the report recommendations and looks to have them translated into legislation.
The Government has already signalled that it does not see financial services reform as a front rank issue and with the next Federal Election now less than 18 months away financial advisers should pragmatically expect that any genuine reaction to the ALRC will occur in the first half of 2026 at the earliest.
What is more, the implementation of the ALRC’s recommendations will need to dove tail with the implementation of the Quality of Advice Review recommendations in circumstances where those changes will require legislative amendments impacting both the Corporations Act.
The importance of the ALRC report is that its recommendations go the mechanics of amending the Corporations Act to generate the long overdue changes necessary to remove the complexity which has made financial advice both expensive and difficult to access.
However, implementation of the report relies on the capabilities of many of the same legislative draftsmen who have been responsible for creating the inefficient patchwork which has crippled the efficacy of the Corporations Act as it applies to financial services and financial planning in particular.
Little of the criticisms of the current regime contained in the ALRC’s final report had not been said before as the commission worked its way through the process and produced interim reports.
What should be remembered is that the ALRC was only brought into the equation to review the Corporations Act as a result of the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Sector.
The Royal Commission findings created political urgency to be seen to be doing something. Five years later, that urgency has dissipated.