Further details of the Government’s next package of advice reforms have been announced.

The counseling profession has scored a victory with the government’s latest announcement, allowing licensees to charge direct fees for advice offered by the new category of counselors.

In a statement on Tuesday evening, Financial Services Minister Stephen Jones revealed more details of the second tranche of the government’s Better Financial Outcomes Program, highlighting its aim to meet the needs of Australians by expanding access to advice high quality, safe and affordable financial services.

The next installment:

• Create a new class of advisors to provide safe, simple advice to more Australians, such as choosing an insurance policy or basic retirement questions.
• Modernize the best interests duty by providing legal clarity that will enable advice on matters of unique or limited scope if this meets the needs of the client.
• Remove security measures so that advisors can focus on the needs of their clients – although well-intentioned, security measures have been interpreted to mean that financial advice should always be comprehensive, even if this is not in the interest of the customer.
• Reform advice so that it helps consumers make informed decisions.
• Clarify the rules on what advice can be funded through a superannuation.
• Enable pension funds to provide useful ‘nudges’ to encourage greater member engagement at key life stages.

The minister clarified that the new category of advisors will be limited to providing advice on products issued by prudentially regulated entities.

“They will not be able to provide advice on more complex matters, such as setting up a self-managed pension fund or advice on a managed investment plan, because of a blacklist that will be prescribed in the regulations,” Jones said.

This, he explained, will allow these advisors to focus on simple topics, while also ensuring that there is a clear boundary between the new class of advisors and professional financial advisors.

“The Government’s vision is that the new class of advisers provides an entry point to rebuilding the financial adviser profession, and the Government remains committed to reforming the wider training pathways for financial advisers,” Jones said.

It also clarified that while the government anticipates that some licensees will choose to charge indirectly for advice offerings, they will now have the option to charge direct fees for services provided by the new class of advisors.

This option, championed by groups such as the Financial Advice Association Australia (FAAA), aims to allow a wider range of institutions to employ the new class of advisers, thereby promoting the neutrality of different advice models.

The Minister also confirmed that the new category of advisers will be prohibited from charging ongoing fees or receiving commissions and will be held to the modernized best interest duty, aligning with the standards set for advisers financial professionals.

“Anti-peddling restrictions will continue to apply, and the new class of advisors will be limited to client-initiated engagement for new clients, ensuring they cannot be used to cold-call clients or offer unsolicited advice,” the minister said.

Licensees will also face additional monitoring and supervision obligations, supported by civil penalties, to ensure that advisers operate strictly within the scope of their expertise and authorization while respecting the best interests duty. and other requirements.

“These measures will provide greater choice and support to the millions of Australians seeking financial advice throughout their lives, while maintaining important safeguards,” Jones said.

“The government is developing a draft bill for public consultation on the basis of these announced parameters.”

It is not yet clear when the bill will be published.