FAAA welcomes bare bones outline of DBFO tranche 2
The Assistant Treasurer and Minister for Financial Services, Stephen Jones has delivered on his undertaking to outline the second tranche of the DBFO legislation before Christmas, but it is short on detail.
The Financial Advice Association of Australia (FAAA) has welcomed the release of the information but lamented the lack of detail with chief executive, Sarah Abood saying the final detail will be important.
“We are looking forward to seeing further detail on how these reforms will work, beyond the high level provided in today’s announcement,” she said.
“Key reforms the FAAA is happy to see in Tranche 2 include greater certainty on the provision of scoped advice, removal of the best interest duty safe harbour steps, and simplification of advice documents. These important reforms will help to reduce the cost and complexity of delivering professional financial advice.
“We have also seen some more information in this announcement on the introduction of a new class of adviser, or “NCA” for short”.
Abood said the government’s recognition that the NCA is a pathway to becoming a qualified financial adviser is welcomed.
“It’s extremely important that the education for NCAs can count towards a full financial planning degree, and that the NCAs of today can become the professional financial advisers of the future. Since the banks and other institutions exited financial advice, those traditional training grounds have been lost. With our numbers having halved in the last five years, and only just over 300 new entrants last calendar year, we urgently need to replenish the ranks of professional advisers. We are pleased to see the government’s recognition of the importance of this.”
Just another Stephen Jones press release repeating previous press releases. Just get it done for heavens sake – its not that hard!
Or don’t, its an awful proposition for Advisers and Australians. Disgraceful.
Backpackers will be able to give “helpful nudges”
What a disgrace !!
It is fanciful for the FAAA to think these NCA’s will upgrade to become properly licenced financial advisers. Why pay for all the education, only to become strangled with red tape, have higher costs and at risk of greater penalties if you make a mistake. What is the upside? Being able to recommend an smsf or mis! Really? Frankly it is more likely that a large portion of the 15,000 remaining advisers will switch to become NCA’s.
Yeah, the list of prohibited advice for NCAs needs to be more extensive than SMSFs and MIS.
Now I’m sitting here wondering why I wasted all that time and money doing a masters degree.
And given cfp is worthless leave the impotent faaa. This is a disgrace for the profession, no win and even worse for consumers.
This is no win for the profession. It plays directly into industry funds and FSC’s hands by denigrating the value real advisers provide while allowing product pushers, sorry meant product providers, to charge fees for their sales force.
Products sales people with 6 weeks training to influence our retirement savings with inept overstepping rot masqueraded as advice to push inhouse sales. We KNOW Vertical Integration is not the answer, this is the Labor Party selling out Australians to pander to the Industry Fund and Asic interests. VOTE THEM OUT
Ahem memo to Ms Abood, when it’s finally released there won’t be much detail, there is no incentive for the Minister to do too much is there ? Trustees will oversee that part. Our roles will become hybrid. AFSLs expand with conflicts of interest like Industrt Funds. Not your fault, just the FAAA has historically been ineffective.
This announcement reveals a carefully orchestrated move to entrench industry super funds’ dominance, but it also highlights how alarmingly out of touch the Financial Advice Association of Australia (FAAA) is with the real dynamics at play. While the FAAA applauds the bare-bones outline of Tranche 2 as progress, their response reflects a dangerous complacency about the broader implications.
The FAAA’s focus on education pathways for the new class of advisers (NCA) and the removal of safe harbour steps underscores how disconnected they are from the actual agenda. The introduction of NCAs isn’t about addressing the adviser shortage or creating a pathway to professionalism—it’s about enabling industry super funds to employ less-qualified individuals to provide scoped advice that ultimately funnels members into in-house products. The FAAA seems oblivious to the reality that this is not a win for independent advisers or consumers but a masterstroke by industry super to solidify their control over Australia’s retirement savings.
Industry super funds like Australian Retirement Trust (ART) and AustralianSuper are leading this charge, leveraging their enormous scale and influence to reshape the financial advice landscape in their favour. ART’s projected growth to $500 billion in assets by 2030, as highlighted by Morningstar, is emblematic of this power grab. With the government’s help, they are creating a vertically integrated ecosystem that independent advisers and retail funds cannot compete with. Their NCAs will be positioned as a free or low-cost alternative, luring members under the guise of accessibility while locking their savings into the fund’s ecosystem indefinitely.
The FAAA’s welcome of the NCA concept as a “pathway” to becoming a professional adviser ignores the real risk: the NCAs are not designed to compete with fully qualified professionals but to undermine them. The reality is these new advisers will be bound to the ecosystem of the industry super funds that employ them, making it impossible for retail super funds or independent advisers to play on a level field.
Furthermore, the marketing dominance of industry super funds is already staggering. Their advertising campaigns saturate every available platform. Now, armed with government-sanctioned “nudges” and NCAs, they’ll market free advice sessions that conveniently steer members into their products, deepening their stranglehold on the sector.
Minister Stephen Jones’ alignment with industry super interests cannot be ignored. His proposals are a gift to these funds, ensuring their dominance under the guise of consumer-friendly reform. Meanwhile, the FAAA appears asleep at the wheel, cheering for reforms that will accelerate the erosion of independent advice while enabling a monopolistic power grab.
This is not the time for platitudes about education pathways or scoped advice. It is a time to recognise the larger game at play: a sector war that pits the industry super giants against the independent financial advice profession and retail super sector. The stakes are high, and unless the FAAA and other stakeholders wake up to this reality, the government will enable the creation of a financial advice monopoly under the banner of “simplification” and “accessibility.”
Well said.
It’s absolutely disgraceful that after almost 3 years this is all the minister can produce. A complete waste of time. We should all be grateful for his incompetence however, given how dangerous and unfair his proposals are.
Gee the advice community is full of negative Nancy’s. How do you run a business. Just get on with it and embrace the opportunities. Simpler SOAs, FDSs gone, best interests fixed, etc. It’s not perfect, nothing ever is.