FOFA amendments still needed despite delay

chief executive FPA fpa chief executive mysuper financial planning financial planning association stronger super financial services council bt financial group association of financial advisers government AFA FOFA future of financial advice FSC senator mathias cormann

16 March 2012
| By Staff |
image
image
expand image

Australia's key financial planning industry organisations have vowed to continue lobbying for amendments to the Future of Financial Advice (FOFA) legislation despite the Government delaying its formal implementation for 12 months to 1 July, 2013.

Both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) welcomed the announcement of the delay, but insisted that changes with respect to factors such as opt-in, annual fee disclosure and best interests were also important.

The Financial Services Council (FSC) also welcomed the 12-month delay in formal implementation, and suggested that it now allowed for the development of a coordinated approach to the introduction of the Government's Stronger Super initiatives, particularly MySuper.

FSC chief executive John Brogden said the FOFA changes would drive significant structural changes across the industry, costing $700 million upfront to implement and $375 million each year in ongoing costs.

"A 12-month transition period will allow businesses to make the necessary changes to IT systems, compliance processes, training and disclosure requirements," he said.

Brogden's sentiments were echoed by the group executive of NAB Wealth, Steve Tucker, who described the Government announcement as "sensible and pragmatic", while BT Financial Group chief executive Brad Cooper said it would allow FOFA and Stronger Super to be introduced as a package.

FPA chief executive Mark Rantall said the 12-month implementation was sensible and consistent with the lobbying efforts of the FPA. He urged the Minister for Financial Services, Bill Shorten, to embrace other recommendations from the FPA.

The Opposition spokesman on Financial Services, Senator Mathias Cormann, said the minister needed to do more than just announce the transition period - he needed to also amend the underlying legislation.

"Now that Bill Shorten has accepted the Coalition has been right all along on the commencement date, he should also accept our other 15 recommendations designed to fix the major flaws in his current proposals," he said.

The 12-month implementation period was also welcomed by SMSF Professionals' Association of Australia chief executive Andrea Slattery, but she sought clarity with respect to the accountants' exemption.

"We welcome this move but would like clarity around whether the extension covers all FOFA Peak Consultation Group (PCG) reforms (including the Accountants' Exemption and Auditor Registration), and also the FOFA Expert Advisory Panel (EAP) issues such as competency standards and SMSF specialisation," she said. 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

1 month 1 week ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month 2 weeks ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month 3 weeks ago

SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positiv...

4 days 23 hours ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

4 weeks ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

3 weeks 3 days ago

TOP PERFORMING FUNDS