The red tape imposed by FoFA is inappropriately and unnecessarily increasing costs for both businesses and consumers, says Shadow Finance Minister Mathias Cormann.
And if they are successful on 14 September, they already have about 50 amendments to the legislation, drafted and ready to implement.
Cormann has already released 16 recommendations on how FoFA could be improved. The key focus points would be:
Abolishing the opt-in provision
Improving the definition of the Best Interests Duty
Provide certainty around the provision of scaled advice, and;
Streamlining the requirements around additional fee disclosures
“We think that to force people to re-sign contracts with their advisers on a regular basis is an unnecessary and costly additional bit of red tape,” Cormann said, regarding the opt-in provision. He said advisers are also facing too much risk of litigation down the track due to uncertainty around the capacity to provide scaled advice.
FPA CEO Mark Rantall says that if the 50 legislation amendments are in line with the 16 recommendations already put forward, then the association would support them.
“The opt-in requirement and fee disclosure statements are quite sig and problematic for the industry and we’d be supportive of amending and removing those…Clarifying best interest as it relates to scaled advice is also a significant requirement and we’d be supportive of that.”
Brad Fox, CEO of the AFA said that 50 sounded like a “ridiculously large” number, but the changes could be as minor as tweaking a word. He said that everyone in the industry was currently facing the challenge of maintaining consumer trust in the superannuation system, and that anything that created more certainty, clarity and long term solutions in advice, would be welcomed.
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