Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Hansard source

Firstly, I would like to thank the senators who have contributed to this debate on the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020. Schedule 1 to the bill strengthens the protections for consumers who are clients of financial advisers under ongoing fee arrangements to prevent fees for no service. Under this legislation each year the client will receive a forward looking summary of the fees they will be charged and the services that they will be entitled to, in addition to the existing disclosure of fees and services. The fee recipient will need to obtain the client's express written consent prior to fees being deducted from an account held in the client's name. And ongoing fee arrangements will need to be renewed annually, instead of once every two years.

Schedule 2 of this bill introduces a new disclosure obligation to ensure that financial advisers who are not independent in relation to the provision of personal advice clearly declare that they are not independent and explain the reasons why.

Schedule 3 to the bill strengthens protections for individuals against paying fees for no service from their superannuation by prohibiting ongoing advice fees in MySuper and increasing the visibility of fees to individuals.

I would like to thank the opposition and also the crossbench for their very constructive engagement on all of these issues. The government has committed to establishing a single disciplinary body for financial advisers in line with the recommendation 2.10 of the Hayne royal commission. In expanding the Financial Services and Credit Panel to perform this function, we're committed to ensuring that advisers act in the best interests of their clients and in line with professional standards. Standards are integral to the professionalisation of the financial advice industry, and we will work to ensure that the framework that is in place for the industry to enforce these standards is strong. These are very important reforms that will restore confidence of Australians in Australia's financial system. I commend this bill to the Senate.

Question agreed to.

Bill read a second time.