The Assistant Treasurer has announced proposed amendments to the Future of Financial Advice (FOFA) legislation.

The Government’s amendments will include:

• removing the opt-in requirements so that advisers no longer need to seek their client’s agreement every two years
• restricting fee disclosure statements to new clients from 1 July 2013
• removing ‘catch-all’ from the best interests duty of advisers
• amending the best interests duty to explicitly allow for the provision of scaled advice to enable consumers to receive “one-off advice” from financial advisers
• exempting general advice from conflicted remuneration: the ban on conflicted remuneration only applies to personal financial advice
• amending grandfathering: advisers can move between licensees whilst continuing to access grandfathered benefits.

ASIC’s response

ASIC will not take enforcement action in relation to the specific FOFA provisions that the Government is planning to repeal. For example, ASIC will not take action for breaches of current section 962S of the Corporations Act 2001, which requires fee disclosure statements to be provided to retail clients with ongoing fee arrangements entered into before 1 July 2013.

ASIC will review and consult on its regulatory guides on FOFA once the proposed amendments have been made.