The Minister for Financial Services and Superannuation, Bill Shorten, has confirmed that advisers who sign up to professional code of conduct will not have to abide by the opt-in requirements.
The Minister made the announcement in Parliament today, at the conclusion of the debate on the Future of Financial Advice (FoFA) reforms.
Effectively confirming speculation earlier this week about an agreement between the Financial Planning Association (FPA) and Industry Super Network (ISN) (see: FPA, ISN Dealing on Opt-in), the Minister said that financial planners who signed-up to a professional code of conduct would be granted class-order relief by ASIC in relation to the opt-in requirement. He did not, however, specify an implementation timeline of four years as originally indicated.
The amendment, as tabled by the Minister, reads as follows:
(1) ASIC may exempt a person, or a class of persons, from section 962K (the opt-in requirement), if ASIC is satisfied that the person is, or persons of that class are, bound by a code of conduct approved by ASIC for the purposes of this section.
(2) A code of conduct is approved by ASIC for the purposes of this section if:
(a) the code of conduct is approved by ASIC under section 1101A; and
(b) ASIC is satisfied that the code of conduct obviates the need for persons bound by the code to be bound by the opt-in requirement; and
(c) ASIC is satisfied of any other matters prescribed by the regulations.
(3) The exemption must be in writing and ASIC must publish notice of it in the Gazette.
In addition, the Government pledged to table legislation by 1 July 2013 which would enshrine the term ‘financial planner/financial adviser’ in law.
Minister Shorten specifically thanked Mark Rantall, FPA CEO, for agreeing to a revision of the approach to opt-in, and the ISN’s David Whitely for his contribution.
Following Minister Shorten’s speech, the debate was adjourned and referred back to the House of Representatives to vote on the Bills and amendment.
riskinfo will continue to update this story as more details come to hand.
So much for the intestinal fortitude of Messrs Windsor & Oakshot ( Wilkey was always doubtful)
Some points to consider
This thing will rely with whats in the Regulations, which are rarely subject to refusal by Parliament
The conditions contained in the Code will be onerous, but may work FOR RISK if there is good faith on both sides ( no evidence of that to date )
The proposed Code looks like it was a result of backroom deals between Shorten, the FPA , FSC and our “friends” the insurers. The latter two bodies will offer the NO CHURN provisions as a sop to the ISN. Funnily, the AFA does not get a mention – have they been sidelined.
Any government can inflict upon “commercial bodies or organisations” any rules they like as to professional conduct etc etc ad infinitum ad nauseam, however some people will still commit acts of criminality or non compliance. The problem isn’t so much in the rules – it’s in the penalties. I mean, aren’t the Storm Financial people still this side of the wall? What about HIH? Can’t the government understand MOST advisers are great people with well intentioned and actioned work records highly thought of and appreciated within their client base. The few ratbags aren’t penalised enough. Opt in clauses and rules of conduct are a farce. Proper professionals don’t need Codes of Conduct – they live the Code every day.The future of the Opt In Clause is dismal. It simply can’t work because it’s a minefield.
And that’s the real problem – Governments introduce these laws withut thinking through their practical application. Look at the cost of Myki – could have employed five thousand people for fifty years. Opt In Clause IF it comes in won’t last two years. The Courts will be full of Opt In Cases. Now let me get back to work. Thank You – Merv Gay
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