DBFO Reforms — Delivering Better Financial Outcomes

What Australian financial advisers need to know about the DBFO changes

What is the DBFO Act?

The Delivering Better Financial Outcomes (DBFO) Act is a package of reforms aimed at simplifying financial advice regulation, supporting more affordable advice, and improving consumer outcomes. It has led to updated ASIC guidance on Financial Services Guides (FSGs), website disclosure, and advice documentation.

Key Changes Under DBFO

• Client Advice Records (CARs) — a new, simpler format for documenting advice that may replace or complement traditional SOAs
• FSG updates — Financial Services Guides must reflect updated disclosure requirements under INFO 291
• Clear communication — greater emphasis on plain English and client-readable language in all advice documents
• Fee disclosure — streamlined ongoing fee arrangement requirements

What This Means for Advisers

AdviserCheck's architecture is designed to be document-type-agnostic — it checks documents against underlying regulatory obligations rather than assuming a fixed SOA template. This means it can analyse CARs, SOAs, FSGs, and other advice documents using the same compliance framework.

Updated ASIC Guidance

ASIC has released updated INFO 291 guidance covering FSGs and website disclosure information, along with revisions to several regulatory guides in response to DBFO. AdviserCheck keeps its prompt templates current with these updates.

Key Changes Under Tranche 1 DBFO Reforms

Tranche 1 of the DBFO reforms commenced in July 2024. The most significant changes for consumers are: the removal of the annual Fee Disclosure Statement (FDS) requirement for ongoing fee arrangements replaced with a simpler renewal notice requirement; standardised renewal notice requirements for ongoing fee arrangements requiring your active consent each year; and clarification that advice fees can be deducted from superannuation accounts under certain conditions, but only with your specific consent.

These changes were designed to reduce red tape while maintaining consumer protection. Previously, advisers were required to send annual FDSs, which many consumers found confusing. The new renewal notice is simpler and more clearly communicates what services you are receiving and what you are paying. If you do not respond to the renewal notice, ongoing fees must stop within 30 days.

What Tranche 2 Proposes

Tranche 2 of the DBFO reforms, published as draft legislation in March 2025, proposes more fundamental changes. The key proposals include: replacing the seven safe harbour steps under s961B with a principles-based "reasonable steps" duty, rationalising the SOA requirements (allowing simpler documentation for basic advice), and modernising the definition of "personal advice" to provide more certainty about what advice requires a licence.

The proposed changes aim to reduce the cost of providing advice while maintaining strong consumer protections. However, consumer advocates have raised concerns about removing the safe harbour steps, arguing that they provide important guidance for advisers and a clear benchmark for compliance. The final form of Tranche 2 will depend on parliamentary consultation and debate.

What DBFO Means for You

For consumers, the practical impact of DBFO is that ongoing fee arrangements will become simpler and more transparent. Your adviser must obtain your renewed consent each year before charging ongoing fees, and the renewal process is straightforward. You also have clearer rights to stop fees at any time.

The proposed changes to the safe harbour steps (if enacted) would not reduce your adviser's obligation to act in your best interests. However, it may become more difficult for consumers to assess whether their adviser has met the duty, since there will be fewer specific steps to check. Regular reviews and asking the right questions will become even more important.

Frequently Asked Questions

When will the DBFO Tranche 2 changes take effect?
As of mid-2026, Tranche 2 is still in draft legislation form. It must pass through Parliament before taking effect, which may happen during 2026 or 2027. Some changes may be implemented in stages.

Do I still receive an annual fee disclosure statement?
No. The FDS requirement was removed from 1 July 2024. Instead, you receive an annual renewal notice that is simpler and requires your active consent for ongoing fees to continue.

How does the new ongoing fee consent process work?
Your adviser must send you a renewal notice each year that sets out the fees you have been charged and the services provided. You must respond to confirm you want the ongoing arrangement to continue. If you do not respond within 30 days, ongoing fees must stop.

Can I still complain about advice if the safe harbour steps are removed?
Yes. Your right to complain about poor advice and seek compensation will not be affected by the removal of the safe harbour steps. The best interests duty remains, and AFCA will continue to assess whether the duty was met.

Regulatory Timeline: 2012 to Today

Each reform below changed what your adviser must do and disclose. Knowing the timeline helps you judge how current your document's obligations are.

Date	Reform	Impact on Consumers
July 2012	FOFA enacted	Best interests duty (s961B), ban on conflicted remuneration, opt-in for ongoing fees
July 2013	FOFA mandatory	Full compliance required — advisers must act in your best interests
July 2016	Accountants' exemption repealed	Accountants need AFSL to give SMSF advice, increasing consumer protection
2018-2023	Royal Commission + response	FEAR Act (2019) — higher penalties, breach reporting, enforceable director duties
Dec 2022	QAR Final Report	22 recommendations including simplified SOAs, new adviser class, streamlined best interests duty
July 2024	DBFO Tranche 1	FSG website disclosure option, conflicted remuneration clarification
Jan 2025	DBFO changes commence	Fee Disclosure Statements removed, streamlined ongoing fee consents, legal clarity for super advice fee deductions
Mar 2025	DBFO Tranche 2 draft	SOA rationalisation, collective charging for super, super fund targeted prompts. Best interests duty modernisation and new adviser class still in development.

Compiled from ASIC regulatory guidance, Treasury’s DBFO implementation materials, the FAAA DBFO Hub and the APESB QAR review.