Minister for Financial Services Stephen Jones has moved to reassure the advice profession that Friday’s draft legislation is not a “back door attempt” to have the new class of adviser giving comprehensive advice.
The government had released exposure draft for consultation on Friday evening for only parts of Tranche 2 of the Delivering Better Financial Outcomes bill, covering the replacement of Statements of Advice with new Client Advice Records, along with updated rules for what can be collectively charged inside of a super fund.
However, the draft bill left out details about the new class of adviser, as well as the removal of the Safe Harbour Steps.
In a post-Budget webinar held by the Financial Services Council, Jones was pressed on some of the concerns the advice community had raised about the draft legislation: that the collective charging rules allowed for holistic personal retirement advice and that these collective charging rules would apply to the new class of adviser.
“Let me be direct, short and blunt: no and no,” Jones said in response to both concerns.
Among those that were critical were the Financial Advice Association Australia, who said their “single biggest concern” in the draft legislation was it appeared to give super funds the ability to collectively charge for comprehensive retirement advice.
“This is concerning on many levels. Firstly, the cost of collectively charged retirement advice is likely to be very much larger than the cost of collectively charged intra-fund advice,” the association’s CEO Sarah Abood said in a statement earlier this week.
“Thus, members of these funds will be paying much higher amounts for advice they are not actually receiving – including members who have sought, and paid for, their own personal financial advice but must still pay for the collectively charged advice provided to other members of the fund on top of that.
“The other key area left unstated is who can offer this type of advice – whether that can be offered via the “new class” of adviser, or only via qualified professional financial advisers (many of whom are already working successfully in super funds).”
Maintaining ‘flexibility’
The draft bill set out an “allowed” and disallowed” topics list, as well as an “allowed circumstance” list, for collective charging.
The disallowed list included “holistic financial planning”, estate and tax planning, and “purchase or disposal” of financial products or assets held outside superannuation.
However, Jones said there will be a clarifying list covering what the new class of adviser will specifically be able to advise on.
“The role of the new class of adviser will be to provide advice on retirement in relation to the person’s interest within funds and we’ve set out what they can do and what they can’t do more broadly in the associated material,” Jones said.
However, some of this detail will be left to be disclosed in the regulatory guides to offer “flexibility” over keeping the list contained to the primary law.
“I can categorically state that this is not some back door attempt to have new class of advisers providing a full range of advice – comprehensive advice – on all things financial. That was never the intent. It’s not what we announced and not what we intend to do.”
While the draft law may appear in isolation to allow funds freedom to collectively charge for advice, Jones noted the broader legal framework prevents this happening.
“Let’s bear in mind, those broader trustee obligations still pertain to the Best Financial Interest Duty, the Sole Purpose Test,” Jones said.
“It’s not the case that this person is going to be able to provide full blown advice on all matters retirement that have nothing to do with their interest in the fund.”
‘Bottlenecks’
In February, the Professional Planner Advice Policy Summit heard Treasury was close to completing the second tranche of DBFO legislation but was struggling with a couple of components.
Jones told the webinar he had to make a call about continuing to wait for the full, complete bill to be ready or to publicly release what was already done.
“I’ve made no secret about my frustration about bottlenecks inside legislative drafting process and I wanted the draft leg earlier and I would have preferred that it was all…included in this package,” Jones said.
“I took the choice to get as much out as we possibly could, and I did that for two reasons. If I get it out before caretaker [mode, after an election is called], our colleagues inside Treasury can continue the work and the consultation process on that together with the unfinished bits.”
While the FAAA’s response to the bill said the results have been “disappointing” given the three years they have invested into the process, Jones separately said he had been committed to wanting to see success for advice reform. “I have personally invested four years in this.”
“We want to ensure the [legislative] detail we’ve released accurately reflects the policy intent and there are no unintended consequences.”
Jones, who announced he would be retiring after the election, again made clear his successor would follow the same policy.
“This is the policy of the Albanese Labor government,” Jones said. “This has all been through cabinet processes.”
Outside of the DBFO, Jones expressed support for reforming the Compensation Scheme of Last Resort after hints at the Advice Policy Summit AFCA’s controversial ‘but for’ provision would be excluded from CSLR cases.
“What I’ve seen emerge over the two years of the schemes operation – there’s some stuff in my mind that doesn’t seem consistent with those objectives – hypothetical losses, for example,” Jones said during the webinar.
“It troubles me and if let run that could well and truly get away [from] us and build irreversible unsustainability within the scheme. I’m moving now.
“I’ve got some thoughts, but they’re only my thoughts at this stage, on some things that we could do pretty quickly to improve the scheme. But again, I stress that point, we’ve got to have an open and deliberative process.”
Jones is flat-out lying, and he’s betting nobody digs into the explanatory material. The draft legislation clearly states that collective charging can fund retirement planning advice “to an existing member to consider whether another product offered by the fund would be suitable.” That’s not vague—it’s a green light for super funds to steer members toward their own products, like annuities, under the banner of “free advice.” This isn’t about helping retirees; it’s a sales funnel dressed up as a public good. Jones can dodge and weave all he likes, dismissing fears of bias, but the wording in the draft doesn’t lie—unlike him. Members deserve transparency, not a minister banking on their ignorance.
This is a lifeline for industry super funds to lock in members and push annuities. The “free advice” channel Jones is championing isn’t free at all—collective charging means every member pays for it, whether they use it or not. Oh, and the kicker? The costs of implementing that advice—like switching to the fund’s shiny new annuity—can also be collectively charged. So, if you’re a member who never asked for this “help,” you’re still subsidizing the fund’s product-pushing machine. It’s a blatant conflict of interest, designed to staple members to the fund for life while sidelining independent financial advisers who actually offer unbiased options. The ALP’s cozy ties with industry super are shining through here—this reeks of a favor to their mates.
Dropping this draft before caretaker mode is a calculated move. With an election on the horizon, the timing screams political payback—industry super gets a policy win, and the ALP gets their campaign muscle. Meanwhile, independent advisers are hung out to dry, facing a rigged system where funds can undercut them with “free” advice bankrolled by collective fees. The FAAA’s complaints are a start, but the advice sector needs to fight tooth and nail—this isn’t reform, it’s an ambush. If this legislation passes, it could gut a chunk of the independent advice industry. Time to call it what it is: a stitch-up that screws members and advisers alike while Jones tip-toes out the door.
We’re clearly being lied to.