Financial Services Minister, Bill Shorten, is expected to release draft Future of Financial Advice (FoFA) legislation next month, according to Treasury officials.
Speaking to advisers and other stake holders at the start of its second round of public consultations, Treasury officials said that following this current round of consultations, an April release of the FoFA legislation by Mr Shorten is likely.
At the Melbourne public consultation earlier this week, the Treasury’s Geoff Miller focussed on four key elements of the FoFA reform package:
- Client Opt-in proposals
- Statutory Fiduciary Duty
- Insurance Commissions
- Intra-fund Advice
the most contentious of the proposals centred around opt-in
Mr Miller presented cases for and against each of these elements and acknowledged the most contentious of the proposals centred around opt-in. This was reflected by the volume of statements from the audience about the potential opt-in provisions, where the clear message to Treasury was the negative aspects of opt-in and its unintended consequences.
On the question of whether risk commissions should be banned, officials told the audience that risk insurance issues were on a slightly different time frame to the rest of the FoFA proposals because Treasury had only commenced considering the risk insurance question in January this year. It is therefore possible that the major part of the FoFA draft legislation will be released in April but there may be a slight delay in announcements about whether risk commissions will be retained.
Advisers and others were encouraged to contact Treasury with their views because, while the process is nearing its completion, it is not yet over and Treasury is still seeking feedback.
The audience was also advised there will be a further round of public consultations following the release of the draft legislation, which is targeted to be introduced into Parliament in its Spring session later this year.
