The government and opposition have pushed through new regulations to allow refinements to be made to FOFA.
Assistant Treasurer Josh Frydenberg has announced that a number of refinements will be made to improve the "operation of FOFA and alleviate a number of unintended consequences, most of which have arisen since the laws were legislated".
A statement from the assistant treasurer explained that the agreed refinements will be progressed through a new regulation before 1 July 2015.
The refinements will clarify that advice provided to an employer about default superannuation funds is considered a financial service to a retail client.
They will make FOFA consistent with other parts of the Corporations Act by including a wholesale and retail client distinction.
FOFA will now treat non-cash payments, such as travel money cards, consistently with other simple financial products.
The refinements will ensure that the modified best interests duty applies in respect of advice on basic banking products and/or general insurance, even where provided at the same time as advice on the provision of consumer credit insurance (which attracts the full best interests duty).
Moreover, the refinements will make the conflicted remuneration exemption that applies to basic banking products and general insurance applicable to benefits relating to consumer credit insurance, where an employee or agent of an authorised deposit-taking institution provides advice on any or a combination of these three products. This will ensure that benefits provided by a retail client to their financial adviser are exempt from conflicted remuneration provisions.
Consultations continue on additional refinements that may be progressed in the latter half of the year, including an extension and alignment of the "periods of time that an adviser has to send an opt-in renewal notice and a fee disclosure statement to their client to 60 days, to facilitate adviser compliance".
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