ANZ warns of FOFA timetable risks
ANZ has warned the Federal Government that it needs to either delay or stage the implementation of its Future of Financial Advice (FOFA) changes or risk imposing undue costs and risks on the industry.
In a submission filed with the Parliamentary Joint Committee reviewing the FOFA bills this week, ANZ has suggested delaying the implementation of FOFA to 2013 to coincide with MySuper - something which it says will avoid an expensive misalignment.
At the same time, the ANZ submission has pointed to the Government not having kept to its word with respect to the two-year opt-in and fee disclosure arrangements.
It said that while the Minister for Financial Services and Superannuation, Bill Shorten, had in August stated the opt-in would apply to new clients from 1 July 2012, the FOFA bills introduced to Parliament had limited the benefits of grandfathering.
"It will only now apply to the renewal notice to clients from 1 July 2012 and does not apply to the fee disclosure requirements," the ANZ submission said.
"ANZ believes that in light of the significant changes that will impact on adviser businesses that both the new opt-in and fee disclosure requirements should operate prospectively to all new clients from 1 July, 2012," it said.
The submission also raised concerns about the anti-avoidance provisions contained in the legislation, and pointed out they had not been the subject of public consultation.
"The current scope of the anti-avoidance provision is so broad as to create uncertainty," it said. "For example, the provisions are not limited to the provision of financial advice and, on our reading, appear to also apply to grandfathering arrangements."
The submission said the main challenge in implementing the FOFA reforms was the significant procedural and systems changes required to give effect to the reforms - something which had been complicated by the uncertainty around the final shape of the legislation and related regulations.
The ANZ submission said if the current deadline of 1 July 2012 remained, it would leave the industry with less than four months to fully comply with the new regime.
AUTHOR
Mike Taylor
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