Friday 20 June 2014
Minister Mathias Cormann has today announced the Government’s response to the Senate Economics Legislation Committee report into the Bill to amend the FoFA laws.
The Minister has confirmed the Government’s commitment to proceed with the amendments to FoFA, but has also supported the FPA’s call to totally ban commissions on investments and superannuation within general advice.
The Ministers announcement today is welcome recognition for FPA members and our public position to protect consumers and stop the re-introduction of product commissions on investments and superannuation.
We have campaigned hard over the past four years advocating for the removal of unnecessary red tape and for a more practical and workable FoFA legislation. To this end the FPA welcomes and supports the following outcomes that have been reflected in the Minister’s announcement:
- A complete ban on commissions on investments and superannuation and the elimination of a possible re-introduction of commissions through the general advice exemption.
- Removal of unnecessary or duplicated red-tape regulation, including Opt-In and retrospective Fee Disclosure Statements.
- Removal of clause ‘g’ in the safe harbour steps of the best interests duty – this will maintain the best interest duty obligation, while providing certainty and clarity for financial planners when acting in the best interests of their client.
- Amending the grandfathering regulations in order to remove the current restrictions on trade for financial planners who may change employers/licensees, and enable fair market competition for financial planners selling their business.
We firmly stand together with all Australians for a better financial future and today’s announcement is a significant step towards a more workable FoFA legislation for all financial planners and their clients.
The Minister has announced that Regulations to enact some of the FoFA amendments will be registered in Parliament to take effect on 1 July 2014 (where legally possible), which means once registered, these FoFA amendments will be law.
The Government will need to follow up with changes to legislation that will likely occur in the coming months, which will include getting the legislation passed through the new Senate.
The FPA will continue to work with stakeholders and all sides of Government to ensure support for changes to the Regulations and help enable passage of the FoFA amendment legislation.