Mulino advances DBFO plan with advice overhaul
Financial Services Minister Daniel Mulino has announced major reforms to financial advice regulations, advancing the Delivering Better Financial Outcomes package 18 months after its second phase was introduced.
The first legislation under the package passed in July 2024, following a review led by Michelle Levy. A second phase, released in March 2025, stalled due to industry changes and a shift in government. Mulino restarted the process after what he described as one of Treasury’s most thorough consultations in years, involving six discussion papers, stakeholder workshops, and written submissions.
Reforms target access, cost, and accountability
At the National Press Club on August 19, Mulino outlined three key areas of reform: superannuation, financial advice, and the Compensation Scheme of Last Resort. The changes aim to improve access to secure, dependable financial advice while addressing affordability and adviser shortages.
A significant change introduces a New Class of Adviser, restricted to APRA-regulated superannuation funds and life insurers. The role is intended to provide straightforward advice, helping ease the sector’s supply-demand gap. To avoid conflicts of interest, the reforms prohibit commissions, bonuses, and volume-based payments for these advisers. A review in three years will determine whether the program should expand.
Mulino also adjusted the best interest duty, permitting scaled advice—simplified guidance focused on immediate needs instead of full financial plans. The government will also review the Adviser Code of Ethics to ensure it remains practical.
The reforms reflect a shift in how financial advice is delivered, particularly for Australians who don’t require or can’t afford full-service planning. The changes aim to reduce complexity while maintaining safeguards.
Super funds face new fee caps and transparency rules
The government will introduce legislation requiring superannuation trustees to enforce advice fee deduction caps for members. This targets cases where high fees for switching advice deplete low-balance accounts, raising concerns about whether such charges align with a client’s best interests.
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Mulino stated it’s hard to justify large fees charged to members with small balances for switching advice. The reforms will require trustees to enforce caps and ensure compliance, while ASIC’s oversight and improved SMSF reporting will increase transparency around fee deductions.
The changes also include simplified statements of advice and intra-fund charging for superannuation-related guidance. Mulino said these measures will cut red tape while preserving consumer protections, though some industry groups warn that streamlined processes could lead to oversights if not carefully managed.
Reforms aim to balance regulation and market confidence
Mulino described the reforms as an effort to strengthen accountability without adding unnecessary rules. “We will remove practices that serve no useful purpose, formalise standards that responsible actors already follow, and support more efficient capital allocation,” he said.
The package includes targeted superannuation prompts, encouraging members to engage with retirement planning at key life stages. The government expects these nudges, along with broader changes, to help Australians manage their retirement savings more effectively.
Critics remain divided. Some consumer advocates say the changes don’t fully address high advice costs, while industry groups worry about the administrative burden of new compliance rules. Mulino acknowledged the trade-offs but maintained the reforms achieve the right balance. “That is not more regulation,” he said. “It is better regulation.”
The adjustments follow shifts in the financial sector, including moves by firms like Challenger to expand into retail markets.
