The FPA has welcomed the announcement by Assistant Treasurer Arthur Sinodinos to amend costly and unworkable aspects of the FoFA reforms as a sensible outcome for the financial planning industry and consumers alike.
CEO of the Financial Planning Association, Mark Rantall said: “The FPA and its members strongly support the underlying goal of the FoFA reforms – to increase the access to, and transparency of, financial advice provided for all Australians.
“We are therefore pleased to see amendments to underpin a more workable FoFA framework for financial planners and their clients. As our members and the wider industry will know, the FPA has long championed changes to ease the cost and red-tape burden imposed by FoFA on financial planners.”
“The Government’s estimated average savings of $190 million a year as a result of these amendments will go some way in helping to improve access and affordability of advice to more Australians”, Mr Rantall said.
The FPA specifically welcomes the following changes:
Changes to the Best Interests Duty, that will better facilitate scaled advice, thereby increasing access to and affordability of advice for consumers;
The removal of the opt-in requirement, which in a fee for service environment and in light of the Best Interest Duty was a redundant policy;
Changes to the grandfathering clause which will make it more equitable and fair for all financial planners when changing licensees or selling their businesses;
Removal of the retrospective legislation on Fee Disclosure Statements to apply only to new clients.
Mr Rantall continued, “These changes are in line with the FPA’s advocacy initiatives from the outset of FoFA and are a positive step in making the reforms more practical for financial planners. However, there is still room to improve. Specifically, we feel there is more to be done to streamline the Fee Disclosure Statement process and we will continue to work with Government and Treasury for improvements in this area.
“The FoFA reforms should not be seen in isolation but as part of a whole effort by the Australian financial planning sector to continue the journey towards becoming a distinct and respected profession. Enshrinement of the term financial planner would further enhance the consumer benefits of FoFA and achieving this milestone will be another key focus for us in the months to come.
“The FPA will review the FoFA amendments in more detail as we consider the impacts on financial planners and their clients. We look forward to working with Government and Treasury in developing draft legislation to implement the changes in the New Year. We pledge to continue our ongoing efforts to enable financial planners to efficiently and effectively deliver on the fundamental, consumer-centric aims of FoFA.”