Treasury is seeking feedback on draft legislation for the Albanese government’s first tranche of financial advice reforms, which include requiring general insurance brokers to obtain commission consent from retail clients if personal advice has been or is likely to be provided.

The consultation opened yesterday and comes after the government introduced a bill in March containing a provision that accidentally banned commissions for general insurance brokers and other intermediaries that operate on a general advice model.

After the wording error was discovered, Financial Services Minister Stephen Jones clarified it remains the government’s intention to retain an insurance exemption from the ban on conflicted remuneration when general advice is provided.

Treasury says the draft regulations up for consultation “ensure the informed consent requirements apply for benefits given in relation to a general insurance product where personal advice is provided”.

An explanatory statement from Treasury says a new paragraph has been inserted to clarify that a benefit given in relation to the issue of a general insurance product to a retail client, where personal advice is provided, will not be conflicted remuneration if the client gives informed consent. 

It says if a retail client receives general advice for a financial product, benefits paid to the licensee or authorised representative will continue to be exempt from the ban on conflicted remuneration. “Informed consent of the client is not required to be obtained under these circumstances.”

The closing date for submissions is July 8. Find consultation details here.