The Australian Securities and Investments Commission (ASIC) remains on track to produce final guidance on two key aspects of the Future of Financial Advice (FoFA) changes by the end of the year, with final guidance on other issues to follow early next year, according to its commissioner, Peter Kell.

On Monday Kell told the AFA National Conference on the Gold Coast that ASIC will release final guidance on the best interests test and scaled advice by December. Guidance on conflicted remuneration will be released in February.

Kell says ASIC has issued four key consultation papers and has received considerable feedback from the industry, which he says will inform its final guidance.

“In addition to these consultation papers, we are now planning to issue an information paper on fee-disclosure statements on our FoFA web page fairly shortly,” Kell said.

The Commission also plans to release a consultation paper on RG146, covering minimum competency and training requirements, having already signalled that basic requirements need to be substantially upgraded.

Tell me about it

Kell (right) said ASIC welcomes feedback on all of its consultation papers, but it is on the issue of industry codes that it is most keen to hear what the industry thinks.

“There are three key issues,” Kell said. “The first is what would be the content of a code that does obviate the need for opt in.

“We expect approved FoFA codes to contain provisions that will achieve substantially the same sort of outcomes that the opt-in requirement itself is intended to achieve. That is, engaged clients, who are receiving valued services for the ongoing fees they pay.

“This is an area where we genuinely are seeking some further feedback from the industry in considerably more detail than perhaps some of the other papers. This is really something where ASIC needs to hear from you, as to what sort of services and what sort of requirements should be in place.

“We’ve also consulted around the form of an approved code. Generally, codes are conceived of as industry-wide and covering a broad range of issues. We’ve asked whether codes could be content-limited. That means, a code that only contains requirements that obviate the need to opt in. Does it have to be broader? We’ve noted some challenges around that, but we want to get some feedback on that.

“And, we want to get feedback on entity-specific codes. That is, could a code be linked to a single provider, or a small number of providers? How big does it have to be in terms of coverage before it should be approved?

“Our consultation paper talks about the potential advantages and disadvantages of these approaches, but they have been raised with us and we thought it was important to receive feedback from the industry.”

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