Steps to take now that FOFA has started
Grant Holley, the head of law firm Holley Nethercote, advises planners to take the following steps in the wake of FOFA’s official start date:
Don’t get bogged down in the day-to-day running of your business. Step back and stay abreast of the law, which is constantly changing.
“There is a tendency for advisers to think that they’ve always treated clients well and looked after their best interests, so they must automatically comply with the new law, but many don’t really understand what that means.”
Get on top of your fee disclosure statement, because it has immediate implications on the documents you are sending out and contracts with long-term clients.
“Planners need to update documentation straight away,” he says, adding that ‘statement of advice’ template documents should also be amended to comply with ‘best interests’ duty.
Scrutinise any potential conflicts of interests to ensure you are prioritising client interests over your own.
“This is very risky, so take the time to read up on the different emphases in the ‘best interests’ duty and ‘safe harbour’ provisions.”
If in doubt, speak to your licensee – they have beefed-up legal teams dedicated to the FOFA reforms. Otherwise, seek legal advice from a firm that has demonstrated expertise in this area.
Recommended for you
The month of April enjoyed four back-to-back weeks of growth in financial adviser numbers, with this past week seeing a net rise of five.
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With the election taking place on Saturday (3 May), Adviser Ratings examines how the two major parties could shape the advice industry in the future.
