FPA commends timely release of FoFA draft legislation
The FPA has welcomed the timely release of the draft amendments to FoFA for a three week period of consultation, as announced today by Assistant Treasurer, Arthur Sinodinos.
FPA CEO Mark Rantall said: “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. We will now carefully consider the draft amendments to ensure they will reduce compliance costs, work in a practical way for planners and their clients and do not introduce any unintended negative consequences.
“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.”
Mr Rantall went on to say the FPA has consistently spoken out against the need for Opt-In and a retrospective fee disclosure statement. It has also backed changes to the Grandfathering Regulations to remove the unintended market competition inequities and restrictions of trade issues for financial planners.
“We believe that opt-in and the retrospective fee disclosure statements are onerous policies that will not benefit Australians seeking quality financial advice. We previously called for the removal of these policies and support the draft amendments that support this removal.”
The draft amendments as put forward by the Assistant Treasurer will:
- Remove the opt-in requirement;
- Amend the fee disclosure regime to operate only prospectively;Remove section 961B(2)(g) (the ‘catch-all’ provision) from the best interests duty;
- Specifically provide for scaled advice;
- Exempt general advice from conflicted remuneration; and
- Fix the Grandfather Regulations to allow financial planners to move between licensees while retaining access to grandfathered benefits.
“The FPA has previously pledged to continue its ongoing efforts that enable financial planners to efficiently and effectively deliver on the fundamental, consumer-centric aims of FoFA and this is the next step in the process. The FPA will be looking to ensure specifically that the Fee Disclosure Statement process is streamlined for the benefit of planners and the end consumer alike,” Mr Rantall said.
The Government’s consultation process will now be open for a period of three weeks, with submissions closing on 19 February 2014. The FPA will be providing a submission to this process and will continue liaising with Government and Treasury to ensure a positive outcome for planners and consumers.
Following the consultation process, the Government expects regulations will be made at the end of March 2014. A Bill is then expected to be introduced into Parliament in the 2014 autumn sitting period with passage scheduled for the winter sitting period.