As predicted: further delay for FoFA amendments

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FoFA amendments have been further delayed after Parliament announced today that the bill has now been referred to the economics legislative committee.

The delay comes after a Wealth Professional story this morning predicted that the standing down of Assistant Treasurer, Senator Arthur Sinodinos, could add another stretch in the FoFA timeline.

Business analyst Max Franchitto said the upset could spark more lobbying and consultation surrounding the FoFA amendments.

"For me it's another reason for everything to be delayed. There will be more consultation with individuals and people will see this as an opportunity to try and convince the new minister to do differently," he said.

The Parliament website reports that on 20 March the senate referred the Streamlining of Future of Financial Advice Bill 2014 to the senate economics and legislation committee for inquiry and report.

The closing date for submissions has not yet been set, but the reporting date is 16 June 2014, it states.

The Financial Planning Association’s general manager of policy and government relations, Dante De Gori, told Wealth Professional the senate selection of bills committee decided to refer the bill to the finance and administration and public administration committee on Wednesday night, before changing their mind and re-referring it to the economics legislative committee.

“I could only imagine that was because they felt it was more appropriate – it makes more sense to me,” he said. “[The economics legislative] committee are more familiar with financial services.”

The referral and subsequent inquiry will add a significant amount to the FoFA timeline and it will probably create uncertainty in the financial advice community, De Gori said.

“It could mean that nothing really happens to the FoFA reforms [for some time]. It depends what the report says, there might be more amendments.”

Even more complicated in the legislative delay is that the regulations are also due to be tabled next week, and these will probably be rejected by the opposition, “which means we’re likely back to square one”, he said.

The FPA expect that there will be a further round of hearings and submissions. De Gori said the committee report date of June 16 indicates that there may be a submission process in April, and hearings in May.

He feels the referral of the bill didn’t necessarily have anything to do with Sinodinos standing down.

“Our view is that we believe it would have been referred to a committee in any case because of the amount of media attention FoFA has sustained,” he said. “It does provide a bit of uncertainty and because it is so prominent in the media there’s confusion amongst consumers and financial planners about what is happening. In saying that we welcome the opportunity to contribute – it’s not ideal but it’s part and parcel of the parliamentary process.”