FOFA remains law until amendments become reality
The Australian Securities and Investments Commission (ASIC) has acknowledged an Abbott Federal Government's intended amendments to the Future of Financial Advice (FOFA) legislation but will not be altering its approach until they become law.
ASIC's senior executive leader, Investment Managers and Superannuation, Ged Fitzpatrick told the Money Management Platforms and Wraps Conference that while the regulator was aware of the Coalition's (FOFA) agenda, it would be continuing to implement the Labor Government's legislation because that represented its statutory obligation.
"We are aware of what the Coalition has said it intends to do, but we are obliged to administer the law as it exists," he said. "We do not have the discretion to take account of changes a future Government may choose to make."
However, Fitzpatrick reinforced the fact that ASIC would be adopting a facilitative approach to the implementation of FOFA and would be seeking to work with dealer groups and financial planners to help them meet their obligations under the FOFA legislation and consequent regulations.
Provided an Abbott Government implements the amendments outlined by the Coalition's spokesman on Financial Services, Senator Mathias Cormann, planners may never need to deliver on the obligations entailed in the FOFA opt-in provisions, with Financial Planning Association (FPA) chief executive Mark Rantall pointing out to the conference that the opt-in provisions were not due to be implemented until mid-2015.
However, ClearView Wealth managing director Simon Swanson said that any changes imposed by a new Coalition Government would be too late to assist planners with respect to the FOFA obligations on fee disclosure statements, with much of the work and consequent costs having already been carried by planners.
Rantall also pointed out that the Coalition had not actually included the annual fee disclosure statement obligations in the list of FOFA amendments it would make in Government.
The likely removal of the opt-in obligation from FOFA legislation will raise questions about the validity of planners using adherence to approved codes of conduct to obviate the need to comply with opt-in.
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