Advisers bewildered over FOFA laws
Constant flip flopping of the Future of Financial Advice (FOFA) laws have left advisers in limbo over what regulations constitute as law, Holly Nethercote believes.
The law firm's partner David Court has urged the corporate regulator to clarify on how it will enforce the FOFA reforms.
"The whole situation is a shambles as far as the industry is concerned because the law changes, it changes back. It becomes all political so licensees are in a very difficult position," Court said.
The Australian Securities and Investments Commission (ASIC) said in December it would take a facilitative approach with licensees when the Abbott Government's amendments to FOFA were disallowed by the Senate in November last year.
But it has not made any further statements.
Court also said the advice industry is generally unprepared for the reinstated opt-in requirements despite the deadline approaching later this year because they anticipated it would scrapped.
"I'm pretty sure the lobby groups and the professional associations are lobbying the government hard on this to get an extension so it doesn't start in 2015," he said.
Court believes some licensees could be in breach because they have not issued fee disclosure statements when they were meant to, or received conflicted remuneration when they should not have because they were relying on a general advice exemption.
"Advisers have been innocent victims of the whole thing and in effect you've got to go and incriminate yourself to ASIC because some politician suddenly decided to change their view on life."
Court expects ASIC to give licensees a grace period of three months or so to return to the bounds of the law if they were operating under laws that were disallowed.
AUTHOR
Malavika Santhebennur
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