The Financial Planning Association of Australia (FPA) says it supports a one-year transition period for the implementation of the Future of Financial Advice (FoFA) legislation and regulations, and has stressed that FoFA should be implemented in a way that produces the best result for consumers.
The FPA’s general manager of policy and government relations, Dante de Gori, says the association believes that “discussions around and the implementation of the reforms are not rushed, potentially resulting in unintended consequences”.
The Minister for Financial services and Superannuation, Bill Shorten, last week gave a clear indication that if the industry needed more time to deal with the practicalities of implementation, then the government was prepared to grant it.
However, Shorten said the government would have no truck with individuals or organisations seeking to delay or overturn the FoFA changes simply because they didn’t like them.
In a statement issued yesterday, De Gori said that “in order to ensure the reforms are implemented accurately, while ensuring the reforms are workable and facilitate a vibrant industry to provide quality advice going forward, we would recommend that the government announces a one-year transition timeframe”.
“We believe this would allow all financial planners the time needed to implement these reforms in a transparent and efficient way,” De Gori said.
The FPA told a Senate Economics Committee Hearing yesterday that implementation of FoFA should remain true to the legislation’s original intent, namely, that financial advice must be in the client’s best interests and “distortions to remuneration, which misalign the best interests of the client and the adviser, should be minimised”, and that in minimising these distortions, “financial advice should not be put out of reach of those who would benefit from it”.
Last week at the national conference of the Self-Managed Super Fund Professionals’ Association of Australia (SPAA), the chief executive officer of the Financial Services Council John Brogden, said the implementation of FoFA was critical and getting it wrong could jeopardise its original objectives.
These objectives were to improve trust and confidence in advice, and to increase access to advice for more Australians, according to Brogden.
“I want to make sure that in five years’ time there are more Australians getting financial advice,” he said.
“It’s as simple as that. That means more advisers; but it has to mean more Australians getting advice, otherwise we’ll have put ourselves through the meat grinder so that fewer people get advice from fewer people, at a greater cost, but of a higher standard.”
