Financial planners will still be required to provide Fee Disclosure Statements (FDS) to all clients, including those with advice relationships predating 1 July 2013, until amendments to the Future of Financial Advice (FOFA) legislation is passed.
The Assistant Treasurer, Senator Arthur Sinodinos, released the draft amendments to the FOFA regulation and legislation which stated that the Federal Government would make changes to the current FDS regime.
However the draft explanatory memorandum for the Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014 states that any change to the FDS requirements for planners will not become active until the amendments have passed through Parliament and received Royal Assent.
"The removal of the requirement to provide a fee disclosure statement to clients who entered into their ongoing fee arrangement before 1 July 2013 applies in relation to an ongoing fee arrangement for those disclosure days for the arrangement that occur on or after the day after Royal Assent," the draft explanatory memorandum stated.
"The current requirement to provide clients with a fee disclosure statement will continue to apply until the new law is in place or new regulations are made".
The status of FDS has raised concerns in some quarters , with some planners opting to continue providing them to all clients while others have opted to work within the context of the amendments.
In announcing the FOFA amendments, Sinodinos said it was expected the Government would have new regulations in place by the end of March and a new bill containing the amendments to be introduced into Parliament during the 2014 autumn sitting period, with passage scheduled for the winter sitting period.
The draft explanatory memorandum also stated the changes would result in "no significant financial impact on Commonwealth expenditure or revenue" and would have no compliance cost impact as they were deregulatory in nature.
Rather, it claimed that based on industry consultation there would be direct ongoing cost savings of approximately $190 million per year and a one-off implementation cost saving of approximately $90 million.
