Draft changes to privacy laws need “further clarification” to avoid “unnecessary” duplicative compliance obligations for financial advisers, the profession’s peak body says. 

Financial Advice Association Australia says it backs the federal government’s objective of strengthening privacy protections and enhancing consumer trust in the handling of personal information.

“However, the FAAA considers that the reforms, as currently drafted, would benefit from further clarification … Without this clarity, there is a real risk of unnecessary regulatory duplication and uncertainty, without a commensurate improvement in privacy outcomes for clients,” the association said in a submission. 

The association wants clarity on how the new principles-based standards are intended to interact with pre-existing regulatory obligations that currently govern the collection, use, disclosure and retention of client information in fields such as financial advice. 

It made a number of recommendations in the submission to the Attorney-General’s department, which launched a consultation last month on the draft Privacy Amendment (Personal Data Protection) Bill 2026. 

One of the recommendations relate to a new test to ensure “fair and reasonable” handling of personal information. 

The association says its members are concerned that the breadth and contextual nature of the proposed test may create uncertainty for advice practices seeking clear and repeatable compliance processes. 

“The legislation should therefore make clear that the collection, use, disclosure and retention of personal information that is reasonably necessary to comply with statutory, regulatory, professional and dispute resolution obligations will generally be regarded as fair and reasonable,” the submission said. 

“This is particularly important in the context of ongoing advice relationships, where advisers may need to access historical client information years after it was originally collected, to: provide further advice … manage insurance claims …  or to satisfy regulatory and record keeping requirements. 

“In limited circumstances a financial adviser may also need to refer to that information in responding to complaints.”