The Financial Planning Association (FPA) has warned that the Government’s Future of Financial Advice (FOFA) legislation remains problematic and has the capacity to generate unintended consequences around financial planning practice valuations.
The FPA general manager, policy and government relations, Dante De Gori said the ‘opt-in’ arrangements had a sting in the tail with respect to practice sales.
"The draft legislation has highlighted a real danger because the Government has long argued that opt-in is prospective , not retrospective," he said. "However, the current draft legislation is unclear on the issue of what happens in the event of the sale of a practice or a book of business.
"This may have a massive impact on practice valuations," De Gori said.
‘We also think that the draft legislation needs to be changed and the FPA would advocate that financial planners and their clients should decide when the opt-in anniversary date is set and the process for opting in," he said.
"This shouldn’t be dictated by legislation," De Gori said.
