Treasury has released draft legislation and draft regulations for consultation to implement the Government’s proposals to amend the Future of Financial Advice (FOFA) legislation.
The package of changes to FOFA, includes:
- removing the opt-in requirements so that clients do not need to sign new agreements every 2 years;
- removing the annual fee disclosure requirements for pre-1 July 2013 clients;
- removing the ‘catch-all’ provision in section 961B(2)(g) from the best interests duty;
- explicitly allowing for the provision of scaled advice;
- exempting general advice from the ban on conflicted remuneration;
- broadening the training exemption from the restriction on employee benefits;
- extending exemptions to consumer credit insurance and general insurance; and
- broadening the existing grandfathering provisions for the ban on conflicted remuneration.
The Government’s intended approach is that time sensitive amendments will be dealt with through regulations, to the extent allowed under the relevant regulation-making powers, and then passed into legislation.
