FOFA Regulations stand: Australian Bankers’ Association

The Australian Bankers’ Association (ABA) said today that the new Future of Financial Advice (FOFA) Regulations provide consumers and the industry with clarity and certainty.

A motion was moved by the ALP to disallow the FOFA Regulations. The Federal Government, with critical support from the crossbench Senators, voted late yesterday not to disallow.

Steven Münchenberg, Chief Executive of the ABA said: “The FOFA Regulations provide the industry with certainty regarding its legal obligations while providing important protections for consumers. The regulations have made a number of important corrections and clarifications. A sensible outcome has been reached.”

“The banking industry has consistently supported the original policy intent of the FOFA reforms, including the introduction of a best interests duty and a ban on conflicted payments. These new and important consumer protections remain despite what critics have been saying.”

“Unfortunately, there has been a scare campaign which has deliberately misconstrued the intent of the new regulations and misrepresented bank practices. The reality is that the technical amendments contained in the FOFA Regulations have tidied up aspects of the law to ensure that the reforms can operate effectively, including protecting consumers.”

“Most importantly, the FOFA Regulations enable consumers to continue to do their banking in simple, easy and low cost ways. Banks can continue to provide free, simple and general advice across banking channels as they do now, and as customers expect. Without these changes, consumers would have faced convoluted practices, causing confusion, frustration and additional and unnecessary costs for them.”

“However, the FOFA Regulations have not just been about banks, they have been about making sure all Australians have affordable access to financial advice from larger financial institutions like banks and superannuation funds, to smaller financial services businesses, from financial advisers located in our cities or located in our regional towns.”

“An important aim of the FOFA reforms is to improve the professionalism of the financial advice industry. The review of professional standards announced earlier in the year by the Federal Government is an important part of changing the culture of the financial advice industry. It is important all Australians have access to quality and affordable financial advice.”

“Now that we have certainty about the regulations, it will be important to finalise the additional regulations as agreed in the next 90 days, and to see the Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014 pass through the Parliament,” Mr Münchenberg said.