12-monthly opt-in back on the legislative agenda
Financial advisers fought hard against the notion of annual opt-in within the Future of Financial Advice (FOFA) legislation but an adviser group is now pointing to the Treasurer, Josh Frydenberg, having moved to institute the arrangement out of the Government’s Royal Commission response.
The Profession of Independent Financial Advisers Group (PIFA) president, Daniel Brammall said the Treasurer had announced last month that legislation would be introduced before 30 June next year “that will effectively illegalise the current opt-in and fee disclosure statement (FDS) arrangements”.
He said that, as well, the Treasurer had signalled the Government would be tabling legislation which would mean that financial advisers were not permitted to provide advice to a new client without first declaring whether they are independent and, if not, why not.
“These reforms add to the complexity that is already facing advisers, burdened by the FASEA [The Financial Adviser Standards and Ethics Authority] education requirements, the loss of legacy commissions that were supposed to be grandfathered, and then there’s the looming membership of an as yet unapproved Code Monitoring body (it’s just six weeks away, folks),” Brammall has told PIFA members.
The Association of Financial Advisers (AFA) has similarly drawn the yearly opt-in move to the attention of members.
The concern on the part of the PIFA and AFA relate to the Treasurer’s Royal Commission roadmap implementation document which, under the heading of legislation to be consulted on and introduced by 30 June, next year, cites “Recommendation 2.1 – annual renewal and payment for financial advice” and “Recommendation 2.2 – disclosure of lack of independence of financial advisers”.
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