Additionally, the government dedicated an undisclosed amount to the Australian Securities and Investments Commission (ASIC) to administer the financial adviser exam. The costs were kept under wraps due to “commercial sensitivities”.

Speaking to the Financial Services Council (FSC) post-budget, Minister for Financial Services Stephen Jones said the MIS review would be a “health check” on the sector and the current regulatory settings.

“We want to have a look at that and to see if existing regulatory settings and oversight settings are right,” Mr Jones said, adding that this review will seek to remedy issues in product providers rather than banking and advice.

“There is a collective interest in getting this right because the compensation scheme of last resort puts in place a collective liability if things go very, very wrong, so we have got to ensure that it does actually operate as a last resort compensation scheme. 

“It has to ensure all the regulatory settings are correct before collapses occur, before malfeasance occurs, before mis-selling occurs and before catastrophic consumer loss.”

Applauding the government’s announcement, FSC chief executive Blake Briggs told ifa: “Positively, the minister also committed the review will focus on opportunities to grow the funds management sector, such as addressing technical barriers to uptake of the corporate collective investment vehicle regime, which is designed to attract foreign capital into the sector.

“The FSC will be taking a lead role in responding to the review on behalf of the industry.”

The exclusion of managed investment schemes from the Financial Services Compensation Scheme of Last Resort Levy Bill 2022 (CSLR) sparked serious backlash against the government last month.

Namely, Financial Planning Association of Australia (FPA) CEO Sarah Abood called the move “disappointing”, while SMSF Association CEO John Maroney labelled the decision a “concern”.