Government's financial advice reforms pass the parliament
Minister for Financial Services and Superannuation Bill Shorten today welcomed the passage of the Future of Financial Advice (FOFA) bills[i] through the Senate.
Mr Shorten said these historic reforms will ensure Australians can access good quality financial advice and give the industry a stronger foundation for growth.
The FOFA reforms introduce a new duty for financial planners and advisers to put their customers interests first, ban the payment of sales commissions and make it easier for a wider range of advice to be provided to consumers.
“As a result of the measures passed by the Senate today, every Australian consumer can be more confident that their financial planner or adviser is putting customers’ interests first and that the advice they receive is not influenced by sales commissions.”
These Bills implement the key elements of the Future of Financial Advice (FOFA) reforms – the Gillard Government’s response to the Parliamentary Joint Committee on Corporations and Financial Services’ inquiry into the collapse of Storm Financial and Opes Prime.
The Gillard Government also moved amendments in the Senate today to implement more flexible transition arrangements announced in March of this year.
While the reforms will still commence from 1 July 2012 as originally announced, the application of the provisions will be voluntary until 1 July 2013. These changes balance consumer needs and industry requirements by giving the financial advising community more time to prepare for the reforms, while still giving early movers the opportunity to provide commission-free advice from 1 July 2012.
Defining the term financial planner or adviser
The Government is consulting on whether the term financial planner or adviser should be defined in the Corporations Act.
“In light of the passage of FOFA, I am seriously considering accelerating the timetable for the resolution of this matter. I will have more to say about this matter shortly.”
“This is an important day for the future of financial advice in Australia. The FOFA reforms will drive greater competition and innovation and are a long term growth strategy for this important industry. I am encouraged by the broad level of support for positive change from across the financial services industry,” said Minister Shorten.
[i] The Corporations Amendment (Future of Financial Advice) Bill 2012 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2012
20 June 2012