The Government’s legislation to streamline the Future of Financial Advice (FoFA) reforms has finally passed the House of Representatives.
The Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014 was originally tabled in the Parliament in March 2014, but debate on the legislation was delayed when the Bill was referred to the Senate Economics Legislation Committee for review (see: Green Light for FoFA Amendments).
Prior to the resumption of the debate on the Bill in the House of Representatives this week, a number of amendments were added to the Bill. These amendments captured the requirements agreed between Senator Mathias Cormann and Clive Palmer in July (see: Palmer Deal Secures FoFA Amendments).
The amendments also included:
- Changes to clarify the general advice exemption and reiterate that commissions continue to be banned
- An extension of the period within which a Fee Disclosure Statement must be issued from 30 days to 60 days
As expected, the Bill drew significant attention from both sides of Parliament, with the more than five hour debate occurring across three sitting days. Rising to sum up, Parliamentary Secretary to the Treasurer, Steven Ciobo, said there had been significant miscommunication about the changes sought by the Government.
“The Bill will not weaken the consumer protections currently provided under FoFA. Rather, they add certainty to industry and consumers alike, and make financial advice more affordable for all Australians,” Mr Ciobo said.
The legislation was eventually passed today in a vote of 82 to 50.
The Bill now proceeds to the Senate, with debate likely in the current sitting period. At the same time, Labor Senator Sam Dastyari is pursuing another disallowance motion to cancel the FoFA amendment regulations that were enacted in July. The motion to disallow has been postponed a number of times, due to prioritised government business, but is likely to be put to a vote this week.
Senator Dastyari previously moved a motion to disallow the regulations (in July), but the motion was defeated. The new motion calls for the regulations relating to grandfathering to be retained, but for all other measures to be rejected. The Bill, if passed by the Senate, will override the majority of the regulations. However, if the regulations are disallowed prior to the legislation being passed, this may result in a period of uncertainty for advisers, as they struggle to interpret which elements of the FoFA regime they must comply with.
Meanwhile in the real world we’re out here trying to help clients and grow our businesses. FoFA has been a major distraction for the industry. The uncertainty it has created is unacceptable. Hurry up, pass the bl**dy legislation and let’s just get on with it.
Thoroughly agree Jason.
Is this FoFA or ASADA – either way it appears to be tax payer funded employees blowing off steam, talk about Labouring a point!
Agree with Jason.
We have offices and staff and they have families that we are responsible for as well as our clients and their families. . We are all trying to protect our clients wealth and provide them with certainty. The longer this goes on the longer Australians still have no trust in the superannuation industry. Most larger problems in the financial industry are about products and not advice. Can we all get on with helping Australians with their retirement planning.
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