FAAA welcomes bare bones outline of DBFO tranche 2

Mike Taylor

Managing Editor and Publisher

4 December 2024

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.”