He said the SMSFA welcomes the proposal to introduce a “modernised and flexible best interests’ duty that will see the removal of the ‘safe harbour’ steps”.

“When coupled with the replacement of statements of advice (SOAs), we believe these changes will make a material difference to the cost of advice,” he stated.

He continued that it was “pleasing” to see the government’s announcement confirming that the Financial Planners and Advisers Code of Ethics 2019 will be reviewed following the implementation of the package. However, he added that it will be essential to ensure that the code is fit for purpose and operates as intended.

“Concerns have persisted since the implementation of the code and whether it operates as intended alongside existing legislated obligations,” he said.

“Aspects of the code have been a cause for concern for some time, with a review and remediation overdue.”

Additionally, Mr Burgess stated that an alternative advice framework for the superannuation sector was anticipated and is necessary for the large superannuation funds to wholly discharge their duties under the retirement income covenant.

He noted that it was quite unexpected to see the banks included in these reforms.

“We acknowledge the need for broader advice to be available to consumers. But the introduction of a new category of adviser called a ‘qualified adviser’ has the potential to be misconstrued,” he said.

“It certainly requires much further consideration. At this stage, it is difficult to assess the impact of this new category of adviser when the scope of advice, and the education requirements, experience, and supervision requirements which underpin it, have not been released.”

The most concerning aspect of the proposed reforms according to the SMSFA is the exclusion of accountants.

“Despite accountants’ advice being included in the QAR terms of reference, there was again no mention of accountants, and the role they play in the advice process in the final report,” Mr Burgess said.

“The lack of a suitable model for appropriately qualified and experienced accountants is an opportunity lost and a poor outcome for consumers. It leaves a critical gap in the financial advice framework, particularly for SMSF trustees who have ongoing advice needs not involving product placement, portfolio management or discreet investment advice.”

He added that the limited licensing model is “dying” and as of 30 November 2023, only 598 accountants who are limited licensed advisers remained.

“Increasing licensing costs, ASIC adviser levies and now the compensation scheme of last resort will see this cohort continue to exit advice at a time when more licensed advisers are urgently needed. Put simply, it is not fit for purpose,” he said.

In conclusion, Mr Burgess said there have been some notable omissions in the proposal such as the Design and Distribution Obligations (DDO) measures (Recommendations 12.1 and 12.2).

“The existing DDO provisions add layers of reporting and administration obligations which do little to enhance consumer protection,” he said.

“The QAR recommendations were, in our view, practical measures that sought to remove unnecessary regulation and red tape.”