Major law firm backs paused FOFA changes

In its submission to the parliamentary inquiry now overseeing the proposed FOFA amendments since Mathias Cormann’s fateful announcement of a temporary freeze, Minter Ellison echoed the Coalition’s long-standing position that the FOFA legislation as it stands is a hindrance to the take-up of financial advice.

“While we support the objectives of FOFA to promote a professional financial advice sector, we have been concerned that certain aspects of the FOFA legislation are inconsistent with the equally important goal of ensuring an efficient, fair and innovative financial sector,” the submission, signed by partner Richard Batten, states.

The submission lists the elements of the proposed Bill that Minter Ellison supports, including the controversial “exclusion of general advice from the prohibition on conflicted remuneration”, despite strong objections to this section by the Financial Planning Association and other stakeholders.

“We believe it is appropriate for general advice given by or on behalf of product issuers to be excluded from the ban on conflicted remuneration,” the submission states.

Indeed, the law firm suggests making an amendment to Section 963B(6) to extend the exemption from “employees of licensed product issuers” to “employees of related bodies corporate of the product issuer” and “agents of the product issuer and others acting under the name of the product issuer”.

In addition, the submission suggests an extension on compliance with FOFA conflicted remuneration requirements of “at least six months” due to the inconvenience of the freeze on the legislation’s passage.