Advisely Partner
Advisely BoardHi Phil, firstly, thanks for all your hard work advocating on both areas! It's good to see some changes which will help with tranche one, but I think most agree the real benefits for advisers will happen in tranche two. When do you think this will likely get passed and how are the discussions going with Stephen Jones? Are you concerned about a change of government having a big impact?
Advisely PartnerThanks Mat. Yes, whilst getting rid of FDSs will be a big outcome for some advisers (those who have not moved to 12 month fixed term agreements), the bigger gains are likely to be through Tranche 2 of the DBFO. There wasn’t much in Tranche 1 for risk advisers, other than the new client consent requirement and confirmation of the retention of commissions (although at the current levels). We see the rationalisation of the Best Interests Duty, removal of the safe harbour and the rationalisation of advice documents as the most important reforms.
There is still a long way to go in this process. I suspect that there is still some work (consultation) that needs to be done before the draft legislation is released and then there is still a period of time between that point and the tabling of the legislation in the Parliament. We remain in regular contact with Treasury and the Minister’s office.
In the Minister’s media release in response to the passing of DBFO Tranche 1 he said “The second tranche of reforms will further increase access and affordability of financial advice and will be developed over the second half of the year”. We obviously want it to happen as soon as possible, and with an election expected in the first half of 2025, we would like it to be fully resolved before the election. Unfortunately, there are no guarantees with this.
I am not particularly concerned by a change of Government, as the Opposition have said that they will fully implement the Michelle Levy QAR recommendations, so they will still drive change. The issue might be that there is a delay for them to transition into the driving seat. Thus, given the election is still as much as 9 months away, and a change of Government is not likely to deliver a significantly different outcome, we will simply focus on driving for change and working with whomever is in Government.
