A legislative instrument released by Governor-general Sir Peter Cosgrove last week was registered in the parliament yesterday and will see the deal struck between the government and opposition following the FOFA disallowance bill come into force from today.
The regulation will mean that advisers are able to retain grandfathered commissions while moving to new licensees, thereby allowing free movement in the advice market.
FPA chief executive Mark Rantall issued a statement welcoming the regulation and arguing it will foster “greater fairness” in the industry.
“When FOFA was being developed we fought hard to remove the restrictions on trade and unfair market competition created by the original FOFA reforms,” he said.
Meanwhile, another regulation also takes effect today which repeals the slated changes to statements of advice agreed to as part of the FOFA negotiations with the Palmer United Party.
Minter Ellison partner Richard Batten says that had these changes not been repealed, advisers would have seen “considerable additional compliance burden” for “marginal (if any) consumer protection benefit”.
More broadly he described both regulations taking effect today as “good news” for advisers on a “terrible day for Sydney and Australia”.
AFA chief executive Brad Fox welcomed both developments, explaining in a communication to members that they will provide the industry with “key improvements and increased certainty”.
Free market benefits the consumer of every industry. A job well done to all who worked to return free market to financial services.