FOFA cannot be separated from MySuper

The Association of Superannuation Funds of Australia (ASFA) has told the Parliamentary Joint Committee (PJC) looking into the Government's Future of Financial Advice (FOFA) bills that the nature of intra-fund financial advice means the legislation must viewed in the same context as MySuper.

In a submission filed with the PJC this week, ASFA said that given the degree of interdependency between FOFA and intra-fund financial advice, it was critical that the FOFA legislation be considered in conjunction with the MySuper legislation.

"To consider the FOFA legislation in isolation, without consideration of its interaction with, and potential impact upon, the provision on intra-fund financial advice risks there being unintended consequences which, at the extreme, may affect the viability of providing such advice," the ASFA submission said.

ASFA has also joined those suggesting that the Government may not be allowing enough time for the implementation of its new arrangements.

It said that while ASFA supported the FOFA reforms, it was important to note that implementation, especially by superannuation funds which will also have to implement changes resulting from the Stronger Super reforms, would "necessitate significant and comprehensive changes having to be made to what are mature and complex arrangements".

"For financial advisers and trustees to be in a position to be able to implement the required changes necessitates a degree of certainly as to the regulatory requirements," the submission said.

The ASFA submission said a variety of strategic and tactical decisions needed to be made. These involved the identification of, and agreement upon the approach to, considerable and extensive alterations to IT systems; processes and procedures, documentation and training.

"Business requirement documents, let alone functional and technical specifications, cannot be agreed upon and signed off, nor most work commenced, until such time as there is a high degree of legislative certainty," it said.

The ASFA submission said that given timeframes that would not see the bill passed by the House of Representatives until May next year, there would need to be a transition period of at least 12 months.