Amended FOFA passes Parliament
The Federal Government has passed its Future of Financial Advice Bill through Parliament after it made a series of key amendments to the legislation.
The Corporations Amendment (Future of Financial Advice) Bill passed through parliament by a vote of 64 to 59, with the support of Federal independents and the Greens. It will now proceed to the Senate.
"It has been a significant concern for the Government that so few Australians access financial advice, when so many of them could be benefit from it. These reforms will increase trust and confidence in the sector and remove the red tape that has prevented low-cost, good quality advice being delivered to millions of Australians,” Minister for Financial Services Bill Shorten said.
The amendments to the legislation will see elements of the opt-in obligation removed.
“While this is an important protection to ensure clients do not pay open-ended, ongoing fees while receiving little or no service, some parts of industry argue this requirement is unnecessary where advisers are members of professional bodies or professional codes which obviate the need for opt-in (for example, if a code requires advisers provide an ongoing service to clients if they charge an ongoing fee),” Mr Shorten said.
The amendments will give the Australian Securities and Investments Commission (ASIC) the ability to exempt advisers from the opt-in obligation if they are satisfied that the adviser is signed up to a professional code which obviates the need for opt-in.