Representative groups within financial services have welcomed the release of the draft amendments to the Future of Financial Advice (FOFA) legislation but will work through the details before making a submission to Treasury.
The Assistant Treasurer, Senator Arthur Sinodinos released the draft amendments earlier today and provided a three week window in which interested parties can provide submissions to the Federal Government regarding the changes.
Financial Planning Association (FPA) chief executive Mark Rantall said the association welcomed the timely release of the draft amendments and the consultation period but would work through the amendments to ensure there were no unintended negative consequences.
Rantall said the FPA also wanted to ensure any changes to FOFA worked to reduce compliance costs and were practical for planners and their clients.
"We are pleased that the Government has therefore committed to consulting on the legal amendments necessary to fix these issues as a matter of urgency," Rantall said.
"The FPA has previously pledged to continue its ongoing efforts that enable financial planners to efficiently and effectively deliver on the fundamental, consumer-centric aims of FOFA and this is the next step in the process."
The FPA will make a submission to Treasury on the draft amendments as will the Association of Financial Advisers (AFA), which welcomed their release within the timeframe set out by the Federal Government.
AFA chief executive Brad Fox said it appeared the proposed changes were consistent with the initial announcement made last year, kept appropriate consumer protection measures and reduced over-regulation in the delivery of financial advice.
Financial Services Council (FSC) chief executive John Brogden said consumers would benefit from the proposed amendments as it would be easier for them to receive affordable advice suited to their needs.
"Clarification on the best interest duty is a positive proposal which will reduce the cost of financial advice in many instances without reducing the protections built into the reforms to protect consumers.
"These changes do not change the substance or the intent of FOFA. The fundamental reforms and increased professionalism of financial advisers remain. However, these small changes ensure FOFA works as it was intended – to improve the quality and quantity of financial advice."
