This new law could transform your retirement, but the clock is ticking

The government made a bold announcement this week – one that could become a legacy-defining move for whichever party sees it through.

With bipartisan support, Labor has committed to passing legislation this term that will allow superannuation funds to offer affordable, tailored financial advice for people with less complex needs. It’s a transformative step that could reshape how financial advice is delivered in Australia – but there’s plenty to unpack here for the average person.

People who start planning for retirement earlier end up in a better financial position.Credit: Andrew Quilty

A tight deadline and big promises

First, the timing: The federal government has committed to getting this done before the term ends, meaning it must pass during the sitting days starting 6th February – leaving just over a week before the latest possible start of election season.

That’s a tight deadline and a big promise. If they miss it, the legacy falls to the next government.

Many commentators believe the government won’t sit again before an election, which would leave this legislation stranded until midyear, even with bipartisan support – delaying much-needed advice for Australians by another six months.

A transformative change for retirees

Second, the impact: This change has the potential to transform the lives of Australians approaching retirement. If the government can deliver, it will provide the kind of timely support that has long been missing for those navigating this critical stage of life.

This legislation addresses key challenges for both the financial services industry and consumers. Surprisingly, few are discussing just how significant these changes could be, even though behind closed doors, it’s reshaping the advice landscape all over again.

The second tranche of the “Delivering Better Financial Outcomes” package introduces a new class of financial adviser designed to provide simple, affordable advice on products issued by prudentially regulated companies.

Super funds step up

For the first time in a long time, super funds will be able to offer advice to their members—many of whom have relatively straightforward financial needs, such as managing their superannuation investments, their home and mortgage, and their age pension income as part of a cohesive financial plan.

Current laws severely limit super funds in this regard, often leaving members with few options other than seeking independent advisers. These advisers typically provide an initial financial plan and most then offer ongoing portfolio management for a fee through their chosen investment platforms and strategies.

This approach doesn’t always align seamlessly with a member’s existing superannuation setup, often resulting in members moving into more complex, managed investment strategies and platforms that they may not fully understand.

Affordable advice through technology

The new legislation removes these barriers, allowing members to access advice directly from their super fund, where they already have an established and trusted relationship. Many funds have indicated they’ll explore offering this expanded advice through a collectively charged model – meaning all members would share the cost via administration fees.

Industry sentiment suggests that costs will be kept down by combining digital advice platforms and tools with an expansion in the availability of personalised advice. The legislation also allows super funds to charge a modest fee for service directly to the person seeking it, where appropriate.

Many funds already charge a nominal fee for retirement planning and setup, so this approach isn’t entirely new.

Single-issue advice: a game changer

Another game changer is the introduction of single-issue advice. Right now, financial advice operates on an all or-nothing basis.

Advisers are required by law to deliver comprehensive advice that considers a client’s entire financial situation. This often costs upwards of $6000 and involves a 100+ page document, creating a burden for both advisers and customers.

The changes will allow Australians to get advice on specific issues – such as managing drawdowns or optimising pension eligibility – without being forced into an expensive, full financial workup. Financial advisers have been anticipating this legislative fix for years, recognising that it will enable them to help more people by offering one-off, single-issue advice.

Financial advice can seem like a maze to navigate, leaving people to turn to less trustworthy online sources.Credit: Simon Letch

Some advisers are already discussing the idea of creating a public ‘menu’ of services, allowing consumers to choose from clearly defined options with predictable pricing for tasks like reviewing their risk profile or making retirement income projections. Others might choose not to offer it.

Choice for consumers

The real revolution, however, lies in the choice this offers consumers. For the first time, they’ll be able to access advice directly through their super fund and, if satisfied with the service, continue with their fund into retirement.

Historically, super funds have lost members to financial advisers or retail platforms – often preferred by advisers for their integrated adviser tools – because they couldn’t provide the advice members needed during this critical transition.

With the ability to deliver tailored advice, super funds will be able to guide their members through retirement, helping them better understand their investments and fostering long-term loyalty.

A win for Australians

This isn’t just a win for super funds; it’s a massive win for Australians looking for simpler, more affordable ways to manage their retirement. One of the most crucial steps in retirement planning is getting the right financial advice – but many people aren’t sure what that advice should achieve.

It all starts with understanding your financial picture and creating a solid strategy.

When you see a financial adviser during your pre-retirement years, you’re typically looking for two things: a clear understanding of your overall financial position with actionable steps to improve it, and a sustainable plan for your future income that ensures your money works for you in retirement while maintaining your standard of living.

Once you’ve nailed your big financial picture, the focus shifts to practical decisions.

This includes ensuring your retirement savings are invested according to your risk profile, in assets that provide both reliable income streams and continued capital growth. It’s also about planning your drawdowns wisely – determining how much you can take out and how to make your money last.

Most people don’t realise that if you’re not a DIY investor, there are two main paths to managing your retirement investments: A hands-on approach, where you work with an adviser who actively manages your investment portfolio, and a hands-off approach, where you rely on your super fund’s professional managers to do the heavy lifting.

Once you’ve nailed your big financial picture, the focus shifts to practical decisions.Credit: Simon Letch

Many independent advisers recommend transferring your super to retail funds or wrap platforms, offering tailored investment strategies managed by professional fund managers.

While this approach can provide more customised solutions, it often comes with higher associated costs – and although some years may deliver better returns, that’s not guaranteed. In contrast, traditional super funds consistently deliver strong long-term returns of 8–10 per cent or higher annually, with fees typically below 0.6 per cent, making them an appealing option for those who value simplicity and lower cost and those who have lower balances to manage.

With this new legislation, Australians will have more choices than ever. Whether you’re looking for one-off advice or ongoing management, these changes are designed to make financial advice more accessible, flexible, and tailored to the needs of everyday people.

The next step in my opinion lies in helping Australians understand how to choose the type of advice that’s right for them – actively.

Bec Wilson is the author of bestseller How to Have an Epic Retirement. She writes a weekly newsletter at epicretirement.net and is host of the Prime Time podcast.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.

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