Australia Passes Landmark Legislation to Reform Financial Advice Sector

The Australian government has officially passed the first stage of a major legislative package designed to improve how citizens access financial advice. Known as the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024, the new law seeks to make professional guidance more affordable and easier to obtain. The legislation represents a significant step in the government's broader plan to modernize the financial services industry. Assistant Treasurer and Minister for Financial Services Stephen Jones stated that the reforms will help Australians earn more and keep more of their money. By removing unnecessary administrative burdens, the government hopes to lower the costs associated with preparing financial advice for everyday people. These changes are a direct response to recommendations from the Quality of Advice Review, which provided its final report to the government in late 2022. The review identified several pain points that previously made it difficult for consumers to receive timely and cost-effective financial planning. The new act focuses on streamlining processes that previously added time and expense without providing clear benefits to the consumer. This first tranche of reforms is only the beginning of a two-part strategy to overhaul the sector. The government is currently developing a second set of measures to further increase the availability of advice, which is expected to be finalized later this year. These upcoming changes will likely include the introduction of a new class of financial advice provider. This new category is intended to support the delivery of simple personal advice, particularly for those managing superannuation during key life stages. The government also plans to review the Financial Planners and Advisers Code of Ethics to ensure it aligns with the new regulatory framework. This review will help maintain high standards of professionalism as the industry continues to evolve. Meanwhile, the Australian Securities and Investments Commission is working to ensure that information on the Financial Advisers Register remains accurate. The regulator has launched a compliance program to verify that adviser qualifications are correctly recorded. These efforts are part of a broader push to ensure that consumers can trust the information they receive from financial professionals. As the reforms take hold, the government aims to create a more efficient system that balances consumer protection with improved access to services. The ultimate goal is to ensure that millions of Australians can secure the financial guidance they need to plan for their futures effectively.