Lobby groups to make FOFA submissions for advisers

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Industry lobby groups are looking forward to the three-week window to comment on the Government’s proposed Future of Financial Advice changes.

Assistant Treasurer Arthur Sinodinos announced yesterday that public submissions on the FOFA changes are open until 19 February.

The Financial Planning Association has advocated for a more practical FOFA since the Labor government brought in the legislation and will be making a submission.  

It does not believe opt-in and a retrospective fee disclosure statement are needed, and backs changes to the grandfathering provisions to remove the unintended market competition inequities and restrictions of trade issues for financial planners, said CEO Mark Rantall.

“We will now carefully consider the draft amendments to ensure they will reduce compliance costs, work in a practical way for planners and their clients and do not introduce any unintended negative consequences.”

The Association of Financial Advisers also plans to make a submission.

“We look forward to working through the detail, consulting with our members and our FOFA Implementation Working Group, and then making a submission to the Government,” CEO Brad Fox said.

At first glance it appears the changes are in line with the intent previously expressed by Sinodinos and retain appropriate consumer protection as well as reduce regulatory overreach, Fox said.

“We will make further comment after a comprehensive review has been undertaken.”

The Association of Superannuation Funds of Australia is pleased the proposed legislation does not change the definition of intra-fund advice.

"ASFA has long said that the cost of this service should not have to be met directly by the member, but instead should be able to be paid for collectively across the fund or fund division,” ASFA CEO Pauline Vamos said.

"We look forward to reviewing the draft legislation in detail and consulting with the Government in order to ensure the final legislation delivers outcomes in the best interest of fund members."

The Institute of Public Accountants is also welcoming Sinodinos' newest announcement, although has not said whether it will make a submission before the proposed legislation moves through the House of Representatives.

“The Government has recognised the complexities associated with key elements of the legislation, particularly in the areas of consumer best interest duty and scaled advice,” the accountancy advocacy group's CEO Andrew Conway said.

“We are very hopeful that the proposed amendments will underpin a practical approach to provide the public with accessible and affordable advice.”

Following the consultation process, the Government predicts regulations will be made at the end of March 2014 and a Bill will be introduced into Parliament in the 2014 autumn sitting period to be passed into law during the winter sitting period.


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