Delivering Better Financial Outcomes (DBFO) package

The DBFO package is the Government’s response to recommendations of the Quality of Advice Review (QAR) final report that was provided to Government on 16 December 2022. The Government announced its initial response on 13 June 2023 and the final response on 7 December 2023.

Schedule 1 of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 (the DBFO Act), which received royal assent on 9 July 2024, represents 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.

The Government announced on 7 December 2023 that remaining legislation as part of the DBFO package (‘Tranche 2’), being its response to QAR final report recommendations 3, 4, 5, 6 and 9, will be developed in 2024. On 4 July 2024, the Government announced that the Tranche 2 legislation would be developed in the second half of 2024.

Overview of the DBFO Act

Schedule 1 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 (Part 1),
Streamlines ongoing fee renewal and consent requirements in the Corporations Act 2001 (Corporations Act), including removing the requirement to provide a fee disclosure statement (Part 2),
Amends the Corporations Act to provide more flexibility in how Financial Services Guide (FSG) requirements can be met (Part 3),
Simplifies and clarifies the provisions governing conflicted remuneration in the Corporations Act (Part 4), and
introduces new standardised consent requirements for life risk insurance, general insurance and consumer credit insurance commissions (Part 5).

On 11 June 2024, the Government released for public comment the draft Treasury Laws Amendment (Delivering Better Financial Outcomes) Regulations 2024, which are regulations supporting the DBFO Act. Comments closed on 8 July 2024.

Transitional periods

The DBFO Act has transitional periods before some amendments commence:

Legislation	Summary	Commencement timing
Advice fee deductions from (Part 1, Schedule 1)	Clarifies the legal basis for super trustees charging a member’s advice fees to their super and associated tax consequences. Amends the mandatory content for non-ongoing fee consents and replaces ASIC’s ability to prescribe this content with Ministerial ability.	10 January 2025 Transitional arrangements of up to 12 months apply to non-ongoing fee arrangements in force on 10 January 2025.
Ongoing fee arrangements (OFAs) (Part 2, Schedule 1)	Removes the requirement to provide a fee disclosure statement, introduces flexibility in anniversary date timing for OFAs, amends the mandatory content for ongoing fee consents and replaces ASIC ability to prescribe this content with Ministerial ability.	10 January 2025 for new OFAs. Transitional arrangements apply to OFAs in force on 10 January 2025 so that current requirements may apply for up to 150 days after the ‘transition day’, which is the anniversary of the day the OFA was entered into that occurs after 10 January 2025.
FSGs (Part 3, Schedule 1)	Permits financial product advice providers to either continue to give an FSG or instead make the FSG information publicly available on their website.	10 July 2024
Conflicted remuneration (Part 4, Schedule 1)	Amends the ban on conflicted remuneration to: Explicitly provide that benefits given by a retail client to an AFS licensee or representatives are not conflicted remuneration. Provide an exception that permits super trustees to pay an AFS licensee or representative a fee for personal advice that relates to a member’s interest in the fund from that member’s interest. Remove exceptions for benefits given by clients for the issue, sale or dealing in financial products. Remove exceptions for the issue of financial products where advice has not been provided in the previous 12 months. Remove the exception for benefits given to ADI agents or employees about basic banking, general insurance and CCI products.	10 July 2024 Amendment removing the conflicted remuneration exclusion for ADI employee/ agents’ remuneration commences 10 January 2025. Transitional arrangements apply for remuneration paid under ADI employee/ agents’ remuneration arrangements in force on 10 January 2025 until the giving of benefits under the arrangement is varied (including by the end of the arrangement).
Consent for insurance commissions (Part 5, Schedule 1)	Requires a person who provides personal advice to a retail client about a general insurance, certain life risk insurance or consumer credit insurance products and receives a commission in connection with the issue or sale of that product to obtain the client’s informed consent before accepting the commission or it will be conflicted remuneration. There are exemptions that apply: renewals of general insurance products (provided certain conditions are met), and where a licensee or representative has purchased an advice business and the original recipient of the commission had already met the consent requirements.	10 July 2025

Legislation

Summary

Commencement timing

Advice fee deductions from

(Part 1, Schedule 1)

Clarifies the legal basis for super trustees charging a member’s advice fees to their super and associated tax consequences. Amends the mandatory content for non-ongoing fee consents and replaces ASIC’s ability to prescribe this content with Ministerial ability.

10 January 2025

Transitional arrangements of up to 12 months apply to non-ongoing fee arrangements in force on 10 January 2025.

Ongoing fee arrangements (OFAs)

(Part 2, Schedule 1)

Removes the requirement to provide a fee disclosure statement, introduces flexibility in anniversary date timing for OFAs, amends the mandatory content for ongoing fee consents and replaces ASIC ability to prescribe this content with Ministerial ability.

10 January 2025 for new OFAs.

Transitional arrangements apply to OFAs in force on 10 January 2025 so that current requirements may apply for up to 150 days after the ‘transition day’, which is the anniversary of the day the OFA was entered into that occurs after 10 January 2025.

FSGs

(Part 3, Schedule 1)

Permits financial product advice providers to either continue to give an FSG or instead make the FSG information publicly available on their website.

10 July 2024

Conflicted remuneration

(Part 4, Schedule 1)

Amends the ban on conflicted remuneration to:

Explicitly provide that benefits given by a retail client to an AFS licensee or representatives are not conflicted remuneration.
Provide an exception that permits super trustees to pay an AFS licensee or representative a fee for personal advice that relates to a member’s interest in the fund from that member’s interest.
Remove exceptions for benefits given by clients for the issue, sale or dealing in financial products.
Remove exceptions for the issue of financial products where advice has not been provided in the previous 12 months.
Remove the exception for benefits given to ADI agents or employees about basic banking, general insurance and CCI products.

10 July 2024

Amendment removing the conflicted remuneration exclusion for ADI employee/ agents’ remuneration commences 10 January 2025.

Transitional arrangements apply for remuneration paid under ADI employee/ agents’ remuneration arrangements in force on 10 January 2025 until the giving of benefits under the arrangement is varied (including by the end of the arrangement).

Consent for insurance commissions

(Part 5, Schedule 1)

Requires a person who provides personal advice to a retail client about a general insurance, certain life risk insurance or consumer credit insurance products and receives a commission in connection with the issue or sale of that product to obtain the client’s informed consent before accepting the commission or it will be conflicted remuneration.

There are exemptions that apply:

renewals of general insurance products (provided certain conditions are met), and
where a licensee or representative has purchased an advice business and the original recipient of the commission had already met the consent requirements.

10 July 2025

ASIC response

Legislative instruments and pro formas

ASIC has registered ASIC Corporations (Amendment) Instrument 2024/554 which modifies ASIC instruments in response to amendments to FSGs that the DBFO Act makes. ASIC has also amended licence condition 52 in the Pro Forma 209 Australian financial services licensee conditions (PF 209) so that new Australian financial services (AFS) licensees will need to meet record keeping obligations in relation to website disclosure information, consistent with the record keeping obligations in PF 209 for FSGs. This ensures technological and format neutrality in FSG record keeping obligations.

ASIC has registered ASIC Corporations (Amendment) Instrument 2024/809 which modifies subsection 941C(5A) of the Corporations Act 2001 in relation to website disclosure information. The amendment provides that a providing entity can make available website disclosure information instead of giving an FSG to a client if the financial service is dealing in a financial product for the purposes of implementing financial product advice that the providing entity provided to the client. This is in addition to where the financial service is providing financial product advice.

Regulatory guidance updates

4 October 2024

On 4 October 2024, ASIC published Information Sheet 286 FAQs: Ongoing fee arrangements and consents (INFO 286) and Information Sheet 287 FAQs: Non-ongoing fee requests or consents (INFO 287). The guidance in these Sheets will apply to fee arrangements entered into on or after 10 January 2025 (the start day) and after certain events following the start day for arrangements already in force on that day.

ASIC also updated the notes to Information Sheet 256 FAQs: Ongoing fee arrangements (INFO 256) and Information Sheet 280 FAQs: Non-ongoing fee consents (INFO 280). The guidance in these Sheets will generally continue to apply to fee arrangements entered into or last renewed before the start day.

21 November 2024

On 21 November 2024, ASIC published Information Sheet 291 FAQs: FSGs and website disclosure information (INFO 291) that replaces guidance on FSGs in former Section C of Regulatory Guide 175 AFS licensing: Financial product advisers—Conduct and disclosure (RG 175) and made consequential amendments to RG 175. ASIC also published Information Sheet 292 FAQs: Informed consents for insurance commissions (INFO 292) on the informed consent obligation for certain insurance commissions.

ASIC also updated Regulatory Guide 246 Conflicted and other banned remuneration (RG 246) to reflect changes in the conflicted remuneration obligations and made consequential amendments to:

Regulatory Guide 126 Compensation and insurance arrangements for AFS licensees
Regulatory Guide 138 Foreign passport funds
Information Sheet 141 Dealing and providing custodial or depository service as secondary service
Information Sheet 228 Limited AFS licensees: Advice conduct and disclosure obligations
Information Sheet 266 FAQs: Records of Advice (ROAs)
Information Sheet 267 Tips for giving limited advice, and
Information Sheet 274Tips for giving self-managed superannuation fund advice.

ASIC