{"id":14909,"date":"2012-03-23T08:28:10","date_gmt":"2012-03-22T22:28:10","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=14909"},"modified":"2012-03-23T08:38:09","modified_gmt":"2012-03-22T22:38:09","slug":"fofa-bills-passed-after-fiery-debate","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2012\/03\/23\/fofa-bills-passed-after-fiery-debate\/","title":{"rendered":"FoFA Bills Passed After Fiery Debate"},"content":{"rendered":"

The Future of Financial Advice (FoFA) Bills have been passed by the House of Representatives after more than two hours of heated debate between the Government and Opposition last night.<\/p>\n

As indicated by the Minister for Financial Services and Superannuation, Bill Shorten<\/strong>, earlier in the day, the Government tabled amendments to both Bills and updated Explanatory Memorandums.<\/p>\n

The Opposition, led by Shadow Treasurer Joe Hockey<\/strong>, also tabled amendments to both Bills, but these failed to achieve the necessary number of votes to be added to the legislation.\u00a0<\/p>\n

The Independent MPs, Rob Oakeshott<\/strong>, Tony Windsor<\/strong> and Andrew Wilkie<\/strong>, who had been lobbied heavily by the industry throughout the process, all voted with Labor.<\/p>\n

The Bills will now pass to the Senate for consideration.\u00a0 As Parliament has now broken for Easter, the next Senate sitting date is Tuesday 8 May.<\/p>\n

Further analysis of the key areas of debate is provided below…<\/p>\n

Opt-in amendment<\/strong><\/p>\n

Among the amendments tabled by Minister Shorten was a change to the opt-in requirement, granting ASIC class order relief for advisers who signed-up to a professional code of conduct.\u00a0<\/p>\n

“The Government will give ASIC the ability to exempt advisers from the opt-in obligation if they are satisfied that the adviser is signed up to a professional code which obviates the need for opt-in,” said Mr Shorten.<\/p>\n

“This ensures that consumers are adequately protected – either by a professional body, or failing that, the opt-in provisions in the law.”<\/p>\n

(For the full wording of the amendment, see: Opt-in Class Relief Offered<\/a>.)<\/p>\n

In his speech to the House, Minister Shorten acknowledged the work of Mr Oakeshott, who he said was responsible for negotiating the amendment with industry.<\/p>\n

Speaking on the amendment, Mr Oakeshott said: \u00a0“As an alternative to the opt-in path I think a code of practice is a sensible cultural move. \u00a0It will encourage greater professional standards… \u00a0If that is all too hard and for some reason that does not work for you, then quite rightly there are opt-in provisions to make sure you participate in the cultural change and the professionalisation, making sure that we have financial products and financial advice delivered to the standard that I hope this House expects.”<\/p>\n

Is it not correct to say that vast numbers of groups in the financial services sector were not even consulted about this amendment?<\/h6>\n

In response to the amendments, Mr Hockey railed against the Government for doing what he called a shonky deal:\u00a0 “Is it not correct to say that vast numbers of groups in the financial services sector were not even consulted about this amendment?”<\/p>\n

Mr Hockey fired numerous questions about the specifics of the new relief arrangement at the Minister.\u00a0 Among them was a clarification that ASIC would be prepared to approve more than one Association’s code of conduct to grant relief to its members.\u00a0<\/p>\n

“There was a negotiation with the Financial Planning Association,” Mr Hockey said. “They had a code of practice. \u00a0I want to know on behalf of all the other industries that that is not going to be the only acceptable code…”<\/p>\n

Minister Shorten replied with a simple, “Yes.”<\/p>\n

Mr Shorten also confirmed that ASIC would provide a resolution on the acceptable codes of conduct by 1 July 2015, to determine which Associations’ members were eligible for the relief.<\/p>\n

Despite the vigorous debate, the opt-in amendment, along with 17 other changes to the first FoFA Bill, were passed 64 votes to 59.<\/p>\n

<\/strong><\/p>\n

Best Interests duty and Scaled Advice<\/strong><\/p>\n

The Government issued amendments to the wording of the second FoFA Bill that took account of industry concerns as to whether the Best Interests duty allowed for the provision of scaled advice.<\/p>\n

“(This amendment)\u00a0responds to concerns by industry about the capacity of financial advice to be scalable in light of the new best interests duty.\u00a0 The amendment includes a note clarifying that a client may seek scaled advice and that the inquiries to be made by the financial adviser into the client’s relevant circumstances will be tailored to the advice sought.”<\/p>\n

Annual Fee Disclosure Statement and Opt-in<\/strong><\/p>\n

The Government provided further clarification on fee disclosure statement requirements, including the removal of the requirement to specify the amount the client will pay in the forthcoming year.<\/p>\n

The Minister also confirmed that an adviser does not have to ‘send’ the opt-in renewal notice but can provide this notification in a number of alternative ways.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Future of Financial Advice (FoFA) Bills have been passed by the House of Representatives after more than two hours of heated debate between the Government and Opposition last night.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8,270],"tags":[],"class_list":["post-14909","post","type-post","status-publish","format-standard","category-associations","category-compliance-regulation","category-remuneration"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/14909","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=14909"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/14909\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=14909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=14909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=14909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}