FOFA amendments still needed despite delay
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.
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
