More FOFA amendments extend FDS timeframes

2 March 2016

Some further flexibility had been injected into the Future of Financial Advice (FOFA) regime with the Parliament agreeing to amendments which extend the timeframe for advisers to send renewal opt-in notices and fee disclosure statements to clients.

The amendments were passed by the Senate last week and represent the culmination of some strong lobbying efforts on the part of planning organisations including the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA).

The amendments also fell within the broad agreement between the Government and the Labor Federal Opposition aimed at tidying up elements of the FOFA regime.

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The changes mean that the timeframe with respect to fee disclosure statements and renewal notices has been extended from 30 to 60 days.

The amendments have also clarified the limitations on the degree to which superannuation funds can pass through the cost of providing financial advice, making it possible for the regulator to view intra-fund advice as conflicted in some circumstances.

The changes passed by the Senate entail a note explaining: "The expression ‘intra-fund advice' is often used to describe financial product advice given by a trustee (or an employee of, or another person acting under arrangement with, the trustee) of a regulated superannuation fund to its members, where that advice is not of a kind to which the prohibition in section 99F of the Superannuation Industry (Supervision) Act 1993 applies. (Section 99F of that Act prohibits trustees of regulated superannuation funds from passing on the cost of providing certain kinds of financial product advice in relation to one member of the fund to another.)"

However, the amendments allow for the addition of the words: "The regulations may prescribe circumstances in which, despite a provision of this section, all or part of a benefit is to be treated as conflicted remuneration".

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