Draft legislation introduced by the government to reform advice as recommended by the Hayne royal commission presents an unprecedented opportunity for advisers, according to the Profession of Independent Financial Advisers.
Last week, Treasurer Josh Frydenberg introduced draft legislation that changes existing laws for ongoing adviser fees as well as require financial planners to warn clients if they don’t meet the test for independence.
But according to PIFA president Daniel Brammall, rather than view the changes as a regulatory hurdle, the reforms are an unprecedented opportunity for advisers.
He noted that the independence test refers to a series of prohibitions listed in section 923A of the Corporations Act.
“Meeting the legal test for independence has never been so achievable. There is so much hype and hysteria in the public domain about this right now but the transition is not as complicated as you might think,” Mr Brammall said.
“Basically, these boil down to just a couple of elements – conflicts of interest and conflicts of duty. When you take a guided approach to looking at your practice then you can methodically remove the obstacles, one-by-one, and legally promote your independence.”
Further, Mr Brammall said advisers should embrace the new culture in financial planning.
“These are not legislative threats, it’s a massive opportunity to create a very solid and valuable professional advisory firm in a short space of time,” he said.
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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