Govt’s exposure draft fulfils industry funds’ advice wish list

Mike Taylor

Managing Editor and Publisher

25 March 2025

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.