Govt’s exposure draft fulfils industry funds’ advice wish list
ANALYSIS
Around a decade ago superannuation fund executives were lobbying for changes to the sole purpose test to allow their funds to broaden the scope of the financial advice they deliver to members – they will have been delighted by the Government’s exposure draft legislation on Advice through Superannuation.
What immediately needs to be understood about the release of the exposure draft legislation is that history will likely show it was opened to consultation almost exactly a week and one day before the Prime Minister, Anthony Albanese, went to Government House to seek a Federal Election.
With the Federal Budget to be brought down by the Treasurer, Jim Chalmers tonight, the way is now cleared for the proroguing of the Parliament and a May Federal Election and the Government will go into caretaker mode meaning that while Treasury will continue to receive submissions not a lot else can or will happen.
The reason superannuation fund executives will be delighted by the exposure draft and related consultation is that they quite specifically spell out how it is intended to amend the Superannuation Industry Supervision Act (SIS Act) to allow superannuation funds to deliver a menu of advice.
And for the removal of any doubt, the superannuation funds wish list of a decade ago has largely been fulfilled.
I am including the list included in the Treasury papers for clarity.
What should be important for financial advisers is the list of topics on which superannuation funds will be precluded from providing advice and it is worth noting that the second list is decidedly shorter than the first.
Importantly, the Treasury document also provides a list of the circumstances which allow superannuation funds to provide particular forms of advice.
Indicating where the Government has landed with it draft, the Financial Advice Association of Australia (FAAA) has indicated it is less than whelmed stating it cannot support the Government’s approach in the absence of substantial change noting that is major concern is “that it appears to give super trustees the ability to collectively charge for comprehensive retirement advice”.
FAAA chief executive, Sarah Abood said this was something which is disturbing at many levels.
While the Federal Opposition has signalled that, generally, it has no major problems with the direction of the Government’s Delivering Better Financial Outcomes (DBFO) legislative package, it has nonetheless signalled it does have issues with the governance of industry superannuation funds.
Thus, the future of the exposure draft must be regarded as uncertain and dependent on the make-up of the Parliament following the upcoming Federal Election.
Also important will be the fact that the while the exposure draft has been developed under the oversight of the Assistant Treasurer and Minister for Financial Services, Stephen Jones, he does not intend recontesting his seat and will no longer be in the Parliament.
All in all, the Government has delivered an exposure draft amid the count-down to a Federal Election and in the knowledge that it will be struggling to hold a majority in the new Parliament.
Real Advisers still burdened with the obscene regulatory Hot Mess,
Vs
Industry Super open to Full Advice from Uneducated, Unqualified BackPackers all paid for by Collective Charges = COMMISSIONS, paid by every member when most members get charged Commissions for NO Service.
As expected from Industry Fund owned ALP & Jonesy.
What a disgustingly sad joke this whole corrupt fiasco is.
I wonder how many of these industry fund advisers ever recommend rolling over to a different fund, or withdrawing assets from super entirely? Not many I wager. Let’s face it, they’re about as conflicted as it’s possible to be, but the government seems to think that’s just fine and dandy.
I can’t help but ponder how Industry Funds manage their conflicts. You are exactly right, I can’t imagine any instance where an employer adviser for an Industry Fund has recommended staying or moving to a non aligned platform.
This is where it gets interesting though. In the absence of proper internal auditing and Best Interests Duty. Shouldn’t ASIC be conducting audits on the Industry Fund advice to determine whether BID has been properly considered with all of their recommendations?
No scope to audit if it’s just a ‘nudge’
Having worked for a Super Fund we were trained in ways to get people to salary sacrifice rather than pay off their home mortgage…One Adviser got sacked because his redemption target was too high…. The best interest obligations, or FASEA codes of conduct do not apply to them. They have of course obligations under trust laws & not mere corps law..hence why they can take 4 years to transfer death benefits to the spouse or pay monies to the CFMEU and now hire Backpackers.
So the only group happy with Jones’ incompetent and wasteful performance as a minister are the union super funds. What a surprise.
Are you saying everything in all these tables they can provide advice on?
The last table is the exclusions.
The authors point is that the inclusions are very broad with only a few exclusions.
I’m looking at this and thinking why did I waste all that time, effort and money on obtaining a Masters degree, when some schlep with 6 months worth of education and training can provide VI conflicted advice and charge the entire member pool for it.
This is an absolute joke, brought to you by an ALP Government who in my opinion exist to serve ‘friends of their party’.
Jones out (achieved), ALP out.
This is another absolute disgusting disgrace by the ALP.
Whilst I am not surprised & horrified at the same time from Jones & ALP pandering to Industry Super wishes.
I am also 100% certain that most BackPacker ISA Sales Call Centre Jockeys will fail miserably trying to give effectively full service advice over the phone.
ISA, careful what you wish for, as this is most likely to become a self inflicted disaster of mass proportions.
What a Joke. Just allow anybody to give Retirement Advice. Conflicted, unethical, corrupted government!!!!
It’s now open season on Retirees. Well done Albo & Stephen! There will be so much corruption with the life savings of Retirees the Government won’t be able to keep up. Theres already an emerging problem of unlicensed accountants providing Financial Advice, and you have now just opened the floodgates to any individual connected to a Super Trustee to provide advice.
The Government has no way of policing its proposal and therefore this will end in disaster, and probably Royal Commission 2.0. Im beggining to think the government simply enjoy these Royal Commissions as it gives them a reason to grab a few headlines. What a disgrace if you let uneducated, vertically aligned Product Manufacturers give Super and Retirement Advice. These organisations are not trained, and or qualified to do the job, and its a massive conflict of Interest. It’s the definition of ‘Conflicted Remuneration’, and the outcome for retirees is even worse than the Banks and Royal Commission 1.0.
Backpackers and overseas call centres will now be the new Financial Advisers of choice if you have an Industry Fund. Good Luck with that. OMG!!
God help us all!!!
No problems for industry super to provide conflicted advice and have their members invest into investment options, where they are the fund manager manager too (conflicted). Sounds very similar to a recent case that has blown up the CSLR….. But it’s all OK because they are industry funds and they can do what they want (sarcasm).
I bet Treasury will give industry super access to the ATO portal for contributions too, whilst advisers are left in the lurch. It works in well with Treasury’s comments about not granting access for advisers as they are only small businesses, and (apparently) means there is a risk of data breach.
It was ALWAYS about the preservation of industry superfund FUM.
ASIC is a joke.
Treasury is a joke.
Labor is a joke.
Keep up with your OFA’s, FSG’s, RoA’s, SoA’s blah, blah, blah.
The entire industry is a joke.
The government’s exposure draft legislation is a shameless gift to industry super funds, masquerading as a step forward for consumers. By amending the SIS Act to allow these funds to collectively charge for a broad menu of financial advice, it hands them the ability to offer “free” advice to millions of members—a competitive edge that professional advisers, running nearly 10,000 small businesses, can’t possibly match. This isn’t about improving financial outcomes; it’s a coordinated “public-private” partnership between the ALP and its industry super allies to undermine independent advisers. The FAAA’s pushback is spot-on—this draft doesn’t just tilt the playing field; it bulldozes it, prioritizing the government’s ideological and financial mates over a vital small business sector.
Let’s cut through the spin: industry super funds are riddled with conflicts of interest, and this legislation only deepens the problem. How many of their “advisers” ever suggest rolling over to another fund or withdrawing assets entirely? Hardly any, because their priority is keeping members—and their money—locked in. Collective charging is just trail commission rebranded—something industry super fought tooth and nail to abolish through campaigns like “Compare the Pair,” only to now embrace it under a new name. The hypocrisy is glaring, but not surprising given the ALP’s track record of favoring its industry super cronies. This is lawfare at its finest: ban a practice, then resurrect it to suit your own ends, all while pretending it’s in members’ best interests.
The stakes here are enormous, and professional advisers are right to sound the alarm. Collective charging isn’t just a sneaky way to say “free” advice—it’s a mechanism to staple members to their funds for life, with little incentive to question whether that’s truly best for them. The ALP was never going to put the livelihoods of thousands of small business advisers ahead of its powerful industry super allies, and this draft proves it. If it passes, many independent advisers could be driven out of business, unable to compete with subsidized, conflicted advice. The FAAA’s pushback is a start, but with an election looming and the draft’s future uncertain, the advice sector needs to mobilize fast. This isn’t just a policy tweak—it’s a power grab that could reshape the industry for years to come.
100% agree. Grab a helmet.
Peter you 100% correct and those of us watching for years have seen this coming incrementally at first, and now all of a sudden, unfortunately many and I mean probably 1200 -2000 planners are too tired, to close to retirement and kicked to the cutter one time to many and will exit. And I doubt the Libs will save us even if they managed to make history and get in with a majority. I’m not been negative just pragmatic and there are many other businesses to buy or get into that don’t treat you with this pure contempt.
And we thought the bikies were the problem. No its the criminals in white shirts and suits that we need to keep an eye on!
Again the FAAA retrospectively arguing something. Absolutely toothless