FoFA aftermath: was it worth it?

The Association of Financial Advisers (AFA) has called on its members and other sectors of the industry to put divisions and self-interest to rest and accept Future of Financial Advice (FoFA) reforms.

While acknowledging ongoing concerns about FoFA from within the AFA, chief executive Richard Klipin said the association’s focus is now on regulatory guides and assisting members in implementing those changes demanded by the reforms.

“All sectors of the industry need to now work together to achieve professional standing in the wider community and implement the reforms efficiently and effectively,” he explained.

“The debate was long and intense and, with the legislation passing, it’s an appropriate time to reflect on what was achieved and ask whether it was worth the effort.”

Klipin believes there were many positive outcomes and cites the following as most significant:

• Extension of an annual opt in to a biannual one, with a potential option that will enable some advisers to avoid opt in if they agree to an ASIC-approved code of conduct.
• Remuneration choice for insurance in and outside of super (excluding group plans).
• A commitment to enshrining the terms financial adviser and financial planner in law
• Softening of the annual fee-disclosure statement requirements
• The Industry Super Funds Network “agenda” driving FoFA was exposed.

“During the debate, AFA was heavily engaged with politicians, regulators, Treasury, the media, the market and all relevant committees, ensuring our members’ voices were heard,” said Klipin, adding that the FoFA debate had enhanced by advisers becoming politically active and individually engaging with their members of parliament.

“This was a true grass-roots movement,” he says.

“There is not a federal MP across the country that does not know who we are and what we do. With a federal election looming in 2013, we collectively need to maintain the focus and capitalise on what has been achieved.

“In the end, the Australian community needs to be able to access trusted and affordable advice.

“This is the ambition of the FoFA legislation and, while it is flawed policy, it is now up to the members of AFA to ensure we deliver as best we can on this premise.”

Klipin says the AFA will work towards providing clarity for its members through upcoming meetings and its National Road Show.