Mascot-based boutique investment advisory business, Global Funds Management, part of the MyMoney group of companies, and fund manager QWL are the first to comply with Future of Financial Advice (FoFA) reforms.
However both are staying tight-lipped on what motivated them to sign on early with Graham Chee, managing director of MyMoney Group, indicating that timing is a factor.
“We are the first group to register for early adoption and have utilised publicly available software designed specifically to address disclosure and opt in. I have been advised by ASIC to not make any comment until the release of the RG [regulatory guidance] regarding best interest,” he told Professional Planner Online.
“I do have procedures in place to address best interest, however ASIC would like me to wait before making any comment.”
Guidance from the regulator on both the best interest duty and scaled advice is expected in the first half of August.
QWL did not respond to PPO’s requests for comment.
Regulator clarifies
ASIC commissioner Peter Kell last week addressed the regulatory framework for FoFA-compliant practices.
“I would like to clarify one question which has been raised with us: will advisers who elect not to adopt the new requirements in advance of July 1, 2013 still be subject to the old Section 945A (of the Corporations Act 2001) reasonable-basis-of-advice provision? The answer is yes,” he told delegates at the Association of Financial Advisers roadshow in Brisbane.
“If you don’t want to comply with the FoFA reforms before July 1, 2013 all the pre-FoFA existing obligations will continue to apply. This includes, for example, the requirement to have a reasonable basis for advice.
“If you want to commence early compliance with the FoFA reforms, before July 1, 2013 you will need to register with ASIC via the approved form and we will add your details to the register.”
Practices wishing to comply with the FoFA reforms before June 30, 2013 need to inform ASIC by lodging a notification in the approved form (FS92) and will have their details added to the register.
More information on this process is available here.
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