Industry funds increase Govt pressure on DBFO

Mike Taylor

Managing Editor and Publisher

2 June 2026

The industry funds lobby is pressing the Government to move ahead on the second tranche of the Delivering Better Financial Outcomes (DBFO) legislation stating: “every day of delay is a day in which the advice vacuum remains open, an opportunity for new business models like Shield and First Guardian develop”.

The Super Members Council (SMC) has told the Treasury that the DBFO “is the single most important consumer protection reform on the Government’s agenda for his sector”.

“It is the reform most directly aimed at preventing the next Shield and First Guardian, not just cleaning up the damage and compensating devastated consumers from the last one,” it said.

The SMC has sought to pitch DBFO delivery as more important that the consumer protections being suggested by Treasury, arguing that the consumer protection package targets the misconduct that has already occurred and the structural conditions that enable it.

DBFO, it argues, “addresses the underlying market failure – the absence of accessible, affordable, trustworthy advice – which created the preconditions for misconduct in the first place”.

The SMC submission argues that if the consumer protections are legislated together with DBFO urgently “they would reset the architecture of the system to make consumers vastly safer and deliver them stronger retirement savings”.

“Legislated apart, or with DBFO further delayed, the consumer protection reforms will end up doing more remediation work than they should have to”.

While focusing on the urgency of DBFO implementation, the SMC submission strongly urge action against the so-called outsourced trustee model and urge stronger requirements around the establishment of self-managed superannuation funds.

Under the heading “close the SMSF safety risk gap” the document says the shift from an APRA-regulated fund to an SMSF is one of the most significant changes in legal status an Australian can make about their retirement savings”.

“The member ceases to be the beneficiary of a regulated trust and becomes the trustee, with the consumer protections of the APRA-regulated system no longer safeguarding their interests”.

“Many Australians are making this change without understanding they are making it, involving a sales process, and the SMSF establishment data shows the pattern is accelerating,” it said.

“Safety reforms must close this gap, not just within the APRA perimeter.”