The DBFO Act, which received royal assent on 9 July 2024, represents the Government’s response to QAR final report recommendations 7, 8, 10, 13.1–13.5 and 13.7–13.9. It is the first tranche (‘Tranche 1’) of Government legislation as part of the DBFO package. 

Overview of the DBFO Act 

• Clarifies the legal basis in the Superannuation Industry (Supervision) Act 1993 for superannuation trustees to charge individual members for financial advice from their superannuation account, and clarifies associated tax consequences under the Income Tax Assessment Act 1997.

• Streamlines ongoing fee renewal and consent requirements in the Corporations Act 2001 (Corporations Act), including removing the requirement to provide a fee disclosure statement

• Amends the Corporations Act to provide more flexibility in how Financial Services Guide (FSG) requirements can be met,

• Simplifies and clarifies the provisions governing conflicted remuneration in the Corporations Act and  introduces new standardised consent requirements for life risk insurance, general insurance and consumer credit insurance commissions.

Transitional periods

The DBFO Act has transitional periods before some amendments commence:

ASIC response 

By November 2024, ASIC intends to issue new guidance on ongoing fee arrangements and consents to deduct fees or costs under non-ongoing fee arrangements to reflect the changes as a result of the DBFO Act.

ASIC also intends to issue a new Information Sheet on FSGs and the new website disclosure information. This Sheet will replace the guidance on FSGs in Section C of Regulatory Guide 175 Licensing: Financial product advisers–Conduct and disclosure. 

As a licensee, we will be waiting for ASIC to issue further guidance in November before implementing any changes to policies and procedures.   

With the exception of FSG’s, given the transitional periods will not apply until after ASIC issues further guidance, we will await the Information Sheets before announcing changes. 

You are welcome to make your FSG available on your website, if you have not already done so