The Federal Government has scored a late win on the Future of Financial Advice (FoFA) reforms with a number of amendments passing through the Senate more than a year since many other amendments were disallowed.
The amendments, which extend the timeframe for advisers to send renewal opt-in notices and fee disclosure statements to retail clients from 30 to 60 days were passed with bipartisan support according to the Minister for Small Business and Assistant Treasurer, Kelly O’Dwyer.
O’Dwyer said the amendments, which were part of the Corporations Amendment (Financial Advice Measures) Bill “should enable the industry to properly prepare and quality assure these documents and for consumers to make an assessment of the value of the advice services provided”.
“FoFA should now be considered settled and given time to work,” O’Dwyer said, echoing similar statements made by the former Assistant Treasurer Josh Frydenberg in earlier this year when he indicated any further changes would need bipartisan support.
“FoFA should now be considered settled and given time to work.”
“The Turnbull Government is now focussed on improving the quality and accessibility of financial advice through a raft of other initiatives, as announced in the Government’s response to the Murray Financial System Inquiry on 20 October 2015,’ O’Dwyer said.
The Association of Financial Advisers (AFA) welcomed the amendments as “a pragmatic improvement to the legislation and better enables advisers to ensure that all information in the statements is accurate and appropriate for their clients”.
AFA, Chief Executive, Brad Fox said the association had consistently requested the measure be adopted and would continue to work to extend the period in which clients return their opt-in notices from 30 to 60 days as well.
“Presently consumers remain at risk of inadvertently not returning an opt-in notice before the deadline through travel, health, bereavement or other issues. To reinstate their relationship with their adviser will come at an additional cost to them for what could be a simple oversight,” Fox said.
The passing of these amendments falls short of the initial set of changes sought by the Federal Government which were introduced into Federal Parliament in March 2014 before being disallowed in the Senate in November 2014.
Those amendments included removing the “catch all” provision from the Best Interest Duty obligations and removing the requirement to provide yearly fee disclosure statements to pre 1 July 2013 clients.
However, the recently passed amendments were passed through a second and third reading of the Senate in a day, more than 14 months after they were halted, meaning they can be presented to the Governor-General for assent.
Is opt-in to be gazetted or isn’t it? I read a financial paper the other day which indicated it may not be included within the raft of these unnecessary and incredibly onerous changes on we advisers?
Paul, from the language of O’Dwyer (‘FoFA is settled’) and the actual piece of legislation that passed through the Senate, whatever amendments that were knocked out in the Senate in November last year are still out.
What this latest amendment did was extend the time frame for advisers to send renewal opt-in notices and fee disclosure statements to retail clients from 30 to 60 days.
Given the amendment extends the time frame to send opt-in notices it would seem opt-in is still a requirement for advisers.
Thanks Jason. One needs the patience of Job to keep up with, and the wisdom of Solomon to understand the changes our industry is undergoing. Will it all make life-risk a better world for clients? Even Solomon would struggle with that one!
Comments are closed.