The Albanese government has announced a new set of measures aimed at making financial advice more accessible and affordable for Australians.
The reforms, part of the second phase of the Delivering Better Financial Outcomes package, seek to address widespread barriers to advice, including high costs and regulatory complexities.
Government research found that a significant proportion of Australians are unable to access the financial guidance they need. Among those aged 45 to 54, four out of five report an inability to afford advice, while nearly three-quarters of Australians aged 18 to 34 have unmet advice needs.
The proposed reforms will introduce a new category of financial adviser focused on providing basic advice on straightforward financial topics, such as selecting insurance policies or addressing simple retirement questions.
These advisers will be restricted to advising on products issued by prudentially regulated entities and will not handle complex matters like self-managed super funds or managed investment schemes.
The reform package includes several measures designed to modernise the advice framework while maintaining consumer protections:
To ensure compliance, licensees employing the new class of advisers will face additional supervision and monitoring obligations, with penalties for violations. Advisers in this category will not be allowed to charge ongoing fees or earn commissions.
The reforms have drawn a mixed but largely supportive response from the insurance and financial services industries, with key stakeholders welcoming the effort to simplify advice delivery while emphasising the importance of maintaining strong safeguards.
NIBA voiced support for the changes, noting their potential to increase access to tailored advice.
“NIBA is pleased to see the government progressing the Quality of Advice Review reforms, recognising the vital role that advice plays in protecting consumers and businesses,” said NIBA CEO Richard Klipin.
The association indicated it would closely review the draft legislation to ensure the reforms effectively balance consumer protection with broader accessibility.
MLC Life Insurance welcomed the proposed reforms, highlighting their potential to make advice more user-friendly and accessible.
“If fully implemented, these reforms will unlock access to simple advice so people can get what they need when they need it,” said Kent Griffin, CEO of MLC Life Insurance.
Griffin added that the changes could help develop a modern financial advice ecosystem that better meets Australians’ needs as they approach retirement.
“These measures demonstrate that simplifying regulations and maintaining strong consumer protections are not mutually exclusive. Together, they will provide the industry with the clarity needed to innovate while giving customers greater confidence in securing their financial futures,” he said.
TAL described the reforms as a positive step toward improving advice accessibility.
CEO Fiona Macgregor noted the changes would help address Australia’s underinsurance challenge by allowing life insurers to offer personalised advice within a regulated framework.
“We recognise that making decisions on financial products can be hard and believe that Australians should be able to access advice when they ask for it,” Macgregor said.
CALI echoed these sentiments, emphasising the potential long-term benefits of the reforms.
“This had to happen. We can’t continue to have almost three and a half million people in this country who are underinsured and unprotected when times get tough,” said CALI CEO Christine Cupitt.
She highlighted the importance of strict consumer protections to maintain trust in the advice process.
“These reforms will allow Australia’s life insurers to provide a better customer experience to the millions of people they serve every day,” she said. “Of course, this will only happen with strict consumer protections and appropriate qualifications to ensure that this is a reliable, trusted, and safe choice for people looking to get advice about their life insurance needs.”
The government plans to release draft legislation for public consultation, allowing stakeholders to provide feedback before the reforms are finalised.
Industry participants have expressed interest in collaborating to ensure the measures achieve their intended outcomes without creating new challenges for consumers or advisers.
