Key accommodations ensure FOFA changes
A letter written by the Minister for Finance and Acting Assistant Treasurer, Senator Mathias Cormann has revealed the extent of the accommodations which sealed Senate endorsement of the Government's Future of Financial Advice (FOFA) regulations.
That letter, addressed to Palmer United Party leader, Clive Palmer, reveals that core to those accommodations was a key element of the Financial Systems Inquiry interim report — establishment of an enhanced public register of financial advisers, including employee advisers, which includes a record of each adviser's credentials and status in the industry.
Also core to the accommodations is the inclusion of a specific 14-day cooling off period and the right to return financial services products witihin that period and the provision of an annual fee disclosure statement for ongoing relationships entered into after 1 July, 2013, and a requirement that any advice or changes to advice should be signed by both the adviser and their client.
Cormann's letter, delivered to Palmer's office shortly before the Senate debate on the FOFA regulations, reveals that the Minister had been in discussion with Palmer for around two days to ensure that efforts by the Australian Labor Party to have the regulatory changes disallowed would fail.
In the background, too, members of both the Association of Financial Advisers (AFA) and the Financial Planning Association (FPA) mounted a concerted lobbying campaign focused on individual members of the Palmer United Party to convince them of the value of the Government's FOFA legislation.
AFA president, Michael Nowak said members of his organisation had begun their lobbying efforts early last week, while the FPA provided its members with materials to lobby parliamentarians on Friday.
The end result was that Senators acknowledged having been contacted by large number of financial planners explaining why they should not support disallowance of the FOFA regulations.
Welcoming the passage of the regulations, Cormann said the Government would keep working with all interested parties in the Australian Parliament and all stakeholders in the financial services industry to continue lifting professional, ethical and educational standards for financial advisers.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
