Two thirds of advisers say they will not be ready in time for the proposed 1 July 2012 commencement of the new Future of Financial Advice (FoFA) reforms.
Responding to our latest poll question, 67% of advisers say they believe they won’t be ready when the FoFA gates to open on 1 July next year, and a further 20% are unsure whether their advice practice will be FoFA ready by that date.
As we go to print, only 13% say they will be ready for FoFA by 1 July next year.
A number of advisers have raised the point that the poll question itself is problematic because the industry does not yet know exactly which of the FoFA reforms, and the details surrounding those reforms, it needs to prepare for:
… by the time this reform gets to government it will have changed again at least 4 times, so we dont really even know what new rules we will HAVE to follow
It is not possible to be ready for FOFA because we do not know what the final FOFA legislation will be. It is likely to change a number of times before it is passed in Parliament.
Another adviser has taken the opportunity to raise the point that those advisers opposed to the contentious opt-in reform should still be voicing their concerns about this measure, rather than simply accepting it will be implemented. He remains opposed:
Why have we as an industry given up on opposing Opt-In? It is unrealistic and fanciful. Let fiduciary obligation take care of that!
It now seems apparent that the full package of changes and the finalised legislation will not be known until at least February next year. Many industry stakeholders, including life companies, dealer group licensees and individual advisers, have said they will need more time to prepare for FoFA, for the same reasons stated above in our poll comments, namely that they don’t yet know the final composition of the Bill nor the administration requirements associated with those measures.
Readers should also take into account the legislation introduced to date has been referred to the Parliamentary Joint Committee for Corporations and Financial Services, headed by Bernie Ripoll, for review. The Committee is not due to report back to Parliament until 29 February 2012.
We will let you know about any comments in relation to FoFA and its implementation timing that may be made later this week by Financial Services Minister, Bill Shorten, when he addresses the FPA National Conference in Brisbane. But in the mean time, let us know what you think, given what you know today, about whether your own practice will be ready to step up to the FoFA starting line on 1 July 2012…
How can we be ready for FoFA if the legislation is not even passed? Implimentation of this must surely be delayed.
We will be ready with all the sensible measures like not charging commissions for super and investments to new customers and charging agreed fees instead. We act in the best interests of our clients anyway so we hope that the legislation with regards to this is not unduly prescriptive (how can advisers with only one product solution act in the best interest of clients is beyond me).With regards to the nonsensical prescriptive measures like opt in and annual disclosure statements (in addition to existing disclosure on client’s statements), we hope that we have a new government that sees the light as this government obviously has a closed mind ( the Treasury officials said as much that they were told what the government wanted done and not asked to look at the most efficient options that will work to achieve the stated objectives). In the meantime we focus on looking after our clients who are the ones that are paying us.
Agreed guys….OTF..my licensee told me at 3pm today that there will be “no advice”, “scaled advice” and “full advice”.
As a full planner,I will be able to give “no” and “full”, but only scaled if the product is on the dealer approved product list.
Scaled apparently, is for those “industry funds, banks and others tied groups” to peddle their single product solution..quickly and legally…..and with no responsibilties, irrespective of whether it is in the “clients best interest” or not.
Wake up Bill and Julia…This has gotta to be a joke…right …seems to me they want to go back 25 years to whatever you have in your little kitbag will do!
Solution…..folks,lets write all business as “NO ADVICE”..this will keep our costs down, with no responsibilty…shh..don’t tell Bill or Julia….the rules will be changed again to make it illegal to do anymore than 5% of your business with no advice…….H’mm, sounds like “time critical” to me.
So much for the last 25 years of revolution…FOOLS
How does what the government want to implement tie in to stopping another Storm Financial scenario? Fees and charges are disclosed in the FSG, SOA and PDS/s; annual ongoing fees disclosed in any ROAs; an annual statement/s from the product provider/s, yet we are now required to annually provide the clients last years fees and charges (on each product they may have, as well as the next years expected fees and charges (which is only supposed to cost $11 in total to collate, put in a letter/document and deliver to the client).
On the other hand, NO DISCLOSURE is required by the industry funds on where the money is spent between the earned rate on investments and the credited rate, yet they spruke about low fees (only the disclosed one).
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