The Future of Financial Advice Reforms: Will They Achieve Their Long Term Objectives?

The Australian population is ageing and retirement services are becoming an increasingly critical part of the Australian economy. Hence the quality of financial advice, particularly in relation to retirement matters, has been an important area of policy focus over the last five years. Reforms to the regulatory frameworks governing the provision of financial advice were enacted in 2012. The Coalition Government made some amendments in July 2014 by regulation, but these changes were disallowed by the Senate in November 2014. This article argues that there is a significant risk that the Future of Financial Advice legislation will lead to a more concentrated financial advice industry, with limited consumer access to impartial quality advice. It suggests that further reforms are required. It seeks changes to the definition of “general advice” in the Corporations Act 2001 (Cth). It also calls for innovative policies and models to promote greater competition and diversity across the financial advice industry and ensure the emerging profession remains consumer centric, innovative and efficient.