Speaking to ifa, AFA chief executive Brad Fox said advisers need to know the full practical implications of the Best Interests Duty (BID) requirement within the FOFA amendment to the Corporations Act.
“Our concern around the best interests duty is the final clause and in particular the ‘and anything that may be relevant’ catch-all phrase,” Fox said.
“It’s hard to know how far-reaching that last clause is, we’d like to have more clarity on what may or may not be included,” he added.
Unless there is further guidance provided from the regulator, lessons will be learned the “hard way” through disputes before the Financial Ombudsman, Fox said.
“For most advisers this shouldn’t be a major concern because most advisers have operated under the best interest duty since they began,” Fox said. “But for those though that operate around the edges, they will need to come back into the middle.”
Other regulatory issues requiring further clarity include the Tax Agents Services Act and new requirements surrounding personal tax advice, as well as the full details on grandfathering.
“We continue to work with Treasury and ASIC about making the regulations liveable,” he said. “They’ve been collaborative.”
Gerry, nice to agree on something–the catch all phrase is a “come in spinner” for the legal profession. It infers that anything caused by anything-even the government is our fault. Dumb Shorten.
The word “mess” comes to mind. Someone needs to create a dictionary of acronyms for the advice industry, I’m getting lost.