Yesterday, the federal government released draft regulations and legislation for public consultation, providing stakeholders with a three-week timeline in which to submit formal responses to the new Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014 outlining the government’s proposed amendments to FOFA.
“In order to provide certainty for industry and to ensure the measures have effect as soon as possible, the government will implement time sensitive measures through regulations to the extent legally possible, with amendments to be subsequently made in the primary legislation,” said a statement from Assistant Treasurer Arthur Sinodinos.
A number of industry representative bodies issued statements welcoming the opportunity to take part in the public consultation process.
“We are pleased that the government has progressed with its promised changes to ensure a more workable FOFA framework for financial planners and their clients,” said Financial Planning Association chief executive Mark Rantall.
“The FPA has long advocated for a more sensible, workable and practical FOFA legislation. We are pleased that the government has therefore committed to consulting on the legal amendments necessary to fix these issues as a matter of urgency.”
The Association of Financial Advisers also issued a statement welcoming the move, with AFA CEO Brad Fox pledging to consult with members through its FOFA implementation working group before lodging an official submission.
“We will make further comment after a comprehensive review has been undertaken,” he said.
Meanwhile the Financial Services Council has reiterated its support for the amended Bill, arguing there would be a direct consumer benefit, as well as benefits to industry.
“The proposed refinements to FOFA outlined today will make it easier for Australians to get affordable advice which is in their best interest,” said FSC CEO John Brogden. “This is good news for consumers.”
The Institute of Public Accountants also welcomed the move as the proposed amendments will “provide more flexibility to accountants in their role of trusted advisers to provide scaled advice”.
Conversely, Industry Super Australia called for the government to conduct a thorough assessment of the impact of the proposed amendments on “consumers and national savings”.
“Industry Super Australia is concerned that these proposed changes will re-permit the payment of conflicted remuneration and re-open the debate about whether a financial planner is an impartial adviser or a sales rep,” said ISA chief David Whiteley.
