The Federal Government will, so far as it can, move to implement its Future of Financial Advice (FOFA) changes by regulation to take effect from 1 July.
The Minister for Finance and Acting Assistant Treasurer, Senator Mathias Cormann, has outlined the Government's FOFA changes including clarifying the grandfathering provisions, giving itself the scope to close out conflicted remuneration where it evolves and retaining what it sees as the essential key elements of the best interests test.
Importantly, the Government's changes will impose an explicity prohibition on any payment made solely because a financial product of a class in relation to which general advice was given has been issued or sold to a client and recurring payment because the person has been given the general advice.
Announcing the changes today, Cormann made clear that the Coalition had explicitly supported he introduction of a statutory best interest duty for financial advisers and a ban on conflicted remuneration or commissions which distorted investment advice.
He said the changes, outlined today, were aimed at striking the right balance between appropriate levels of consumer protection and ensuring the availability, accessibility and affordability of high quality financial advice.
The changes announced by Cormann have been welcomed by the Financial Planning Association (FPA), with its chief executive, Mark Rantall, saying it was both welcome and a common sense.
"The FPA will now lend its weight to seeing through the orderly implementation of today's FoFA announcement into law, and encourages its members to embrace the upside benefits of operating within a world's best consumer protection framework," Rantall said.
