The new regulatory era begins today, despite last minute lobbying from industry and the Coalition to have the Future of Financial Advice reforms postponed for twelve months.
The new rules around conflicted remuneration, fee disclosure and fiduciary duty – announced by current Treasurer and former financial services minister Chris Bowen in 2010 following the Ripoll inquiry – will take effect from today, with several key reform items still seemingly unclear.
Association of Financial Advisers chief executive Brad Fox told ifa on Friday that his organisation was throwing its support behind the call for a 12-month reprieve, since further guidance is required before the changes are fully practicable.
“We think some form of extension is necessary and the reason is that there are so many things still unknown,” Mr Fox said.
“The context is that government, ASIC, Treasury and the industry have all underestimated the challenge to be ready by Monday.
“It’s not through lack of resources at industry level – we still don’t have grandfathering regulations or corporate super guidance; this is a sector of the industry that has had the door shut.”
Shadow minister for financial services Mathias Cormann also lent his support for the last-minute postponement push, as reported by ifa sister title InvestorDaily on Thursday.
"The implementation of FOFA and Stronger Super clearly should be extended by 12 months,” Senator Cormann said.
"It is highly undesirable to have large numbers of financial services providers forced into a situation where they have no chance but to be non-compliant.”
Offering a global perspective, Gillian Cardy, managing director of the IFA Centre, a UK trade association for independent financial advisers told ifa that Australian advisers have little choice but to get on with it now that FOFA is a reality.
“What is absolutely obvious from everything that has happened here is that a lot of advisers simply didn’t leave enough time,” she said. “If you need to develop a new value proposition, that could take a year or more, so please don’t leave it to the last minute.”
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