Members of the Financial Planning Association (FPA) who subscribe to its Professional Ongoing Fees Code have been granted relief from the opt-in requirements attaching to the Future of Financial Advice (FOFA) legislation.
The relief was confirmed by the Australian Securities and Investments Commission (ASIC) today, with the regulator saying it had approved the FPA Code on the basis that it would achieve the same policy outcomes as those intended by opt-in — to protect disengaged clients from paying ongoing financial advice fees where they have received little or no advice.
The ASIC announcement said a crucial part of the FPA Code was that it met and maintained certain minimum code governance requirement, particularly around the FPA implementing processes to ensure that subscribers were actually complying with the Code, including the imposition of sanctions.
ASIC noted that it had the power to revoke its approval of a code where it was satisfied that the code no longer met the requirements.
Comments
The detail of this will be fascinating. I imagine it will require fees to be turned off where service is not delivered - whether attempted to be delivered or not. This will put a lot of pressure on large client base businesses i.e. you can't say you espouse to the Code on Fees and get the Opt-in flexibility, or you continue with the current and deal with Opt-in. It will be a business decision, but I'm not sure that's how I would like to see it. It should just be mandatory for all - we'll end up with many business 'types' to add to the already aligned, non aligned, independent, vertically independent, plethora of businesses - not indicative of a true profession.
What an insult. Taking 3.5 years to approve a code which involves a 2 year Opt-In regime is simply outrageous. Presumably grandfathered clients convert to Opt-In under the code, so good luck getting signatures. ASIC is laughing at you FPA. If any other professional organisation was treated this way, there would be outrage. Grow some kahuna's for god's-sake!
Well said Ben and Phil.
FPA have essentially become irrelevant to everyone except themselves and the inept Gov & biased regulators.
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