The Minister for Financial Services and Superannuation, Bill Shorten, is expected to announce variable transition arrangements for the implementation of the Government’s Future of Financial Advice changes.
While the Financial Planning Association has used a submission to the Senate Economics Committee to argue for a 12-month transition period and Financial Services Council chief executive John Brogden has predicted such an arrangement, Shorten has thus far refused to commit to specifics.
All Shorten has been prepared to say is that there will be appropriate transition arrangements – something which is being interpreted as meaning that at least some elements of the changes will be introduced effective from the original 1 July 2012 start date, while other, more complex elements impacting industry infrastructure will be implemented over time.
Many of the changes impacting financial planner remuneration are expected to be applied effective from the legislation start date.
As well, with the Parliamentary Joint Committee (PJC) reviewing the FOFA bills expected to table its findings in the next few days, few people expect the minister to make a definitive announcement on transitionary arrangements until the committee report is made public.
While the Federal Opposition has signalled its desire for the PJC to produce a bipartisan report, Money Management understands that Government and Coalition members of the committee have not been able to agree on the key issue of opt-in giving rise to the likelihood of a dissenting report.
As well, NSW independent Rob Oakeshott has declared he will not be supporting opt-in when the matter is brought on for debate in the House of Representatives – something that is likely to result in an amendment which might then be opposed in the Senate.
In the meantime, the head of financial services at Chan & Naylor, David Hasib, has claimed the current leadership challenge within the Australian Labor Party has acted as a distraction to progressing FOFA.
"We at Chan & Naylor are already expecting delays of up to 12 months for FOFA reforms and are concerned there will be even longer to wait should this leadership battle become ongoing," Hasib said.
