This week, the financial services landscape saw transformative changes with Treasury's release of the second tranche of Delivering Better Financial Outcomes reforms, replacing traditional Statements of Advice with more flexible Client Advice Records. This regulatory shift coincides with a politically charged Federal Budget focused on cost-of-living relief through tax cuts, creating tension between structural industry reform and addressing immediate economic pressures facing Australian households.
Financial Advice Highlights
The advice sector received the long-awaited DBFO Tranche 2 reforms with mixed reactions. While replacing SOAs with more flexible Client Advice Records aims to streamline documentation, industry bodies, including the FAAA, described the package as "concerning" and "disappointing," arguing that it offers minimal substantial change to reduce compliance burdens. Adviser movements between licensees continue, with Centrepoint Alliance benefiting from Sequoia exits, reflecting ongoing market consolidation and the shift toward smaller, privately-owned licensees. Read the complete Financial Advice Weekly Update →
Investment Landscape
Platform providers are accelerating technological integration, with AMP North embedding a market-first GenAI capability to streamline adviser workflows through an AI filenote assistant. Meanwhile, the private credit sector faces increased scrutiny as SQM Research commences a sector watch, citing 14 specific issues of concern. In the ETF space, BlackRock's portfolio rebalancing triggered record-high ETF trades on the ASX, while research reveals only a sliver of Australian global equity managers beat their benchmark indices. Read the complete Investment Weekly Update →
Superannuation Developments
Fund consolidation continues with the official merger of Mine Super and TWUSUPER, with Mercer predicting accelerated consolidation that could reduce the number of funds to just 12 by 2028. Research reveals concerning trends, with an increasing proportion of retirees carrying mortgage debt into retirement and only 10% of insurance inside super being properly underwritten, raising questions about sustainability. Meanwhile, despite industry opposition, the government confirmed that both payday super and the $3 million super tax remain on track for implementation. Read the complete Superannuation Weekly Update →
Life Insurance Trends
The intersection of technology and risk solutions under general advice models is gaining traction, with industry polls showing growing adviser interest in technology-enabled frameworks that could address persistent advice accessibility challenges. AIA Australia has proposed tax incentives for life insurance premiums to combat Australia's chronic underinsurance problem. Meanwhile, the proposed ban on adverse genetic testing in life insurance underwriting has sparked debate, with the FAAA raising equity concerns about potential impacts on premium rates for the broader insured population. Read the complete Life Insurance Weekly Update →
Regulatory Focus
ASIC has updated its Markets Disciplinary Panel regulatory guidance, streamlining procedures for market participants and enhancing transparency in enforcement actions. The Treasury has published an exposure draft of legislation to establish an innovative digital asset industry in Australia, addressing regulatory challenges posed by cryptocurrencies and blockchain technologies. Superannuation funds advocate for 60-day timeframes on breach report handling to manage compliance obligations better, while others criticise Treasury for not prioritising the finalisation of fee consent forms. Read the complete Regulatory Weekly Update →
Looking Ahead
Industry stakeholders have until April 22, 2025, to provide submissions on the DBFO Tranche 2 draft legislation, with implementation details on the new class of advisers and best interests duty still needed. The upcoming federal election, expected in Q3 2025, creates uncertainty around the timeline for implementing announced reforms. Meanwhile, APRA's increased focus on operational resilience and cybersecurity signals growing regulatory expectations across the financial sector. Executive Director Jane Magill emphasises that boards must enhance their oversight capabilities or risk significant business disruption.
