Industry underestimated the enormity of FoFA

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Financial Services Council (FSC) chief executive wrote to newly appointed Prime Minister Kevin Rudd, Financial Services Minister Bill Shorten and Treasurer Chris Bowen on Thursday morning to ask that the July 1 implementation of the Future of Financial Advice (FoFA) and Stronger Super reforms be postponed for 12 months. With the change of Prime Minister and Treasurer, Brogden said it was appropriate to raise the question.

AFA CEO Brad Fox says he would welcome any sort of delay, though 12 months would be very generous.

“I would think that if it was three months, we’d be having the same conversation. It would be improved, but would have the same elements. I think six months would be the minimum to achieve what we would be seeking by getting a delay.”

It’s not only advisers that need to prepare, but the whole industry, and Fox says ASIC and Treasury have their own dilemmas to sort through. “We’re still waiting on guidance on things like conflicted remuneration, grandfathering and corporate super. This stuff starts on Monday and we don’t have the final guidance yet.”

He says it is not for lack of trying, but that everyone has simply underestimated the enormity of the change. And while he agrees that ASIC will have to improve their act to get guidance out, Fox says it takes time to gather the views of so many different parties, consult, and put them into the right framework.