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Future of Financial Advice (FOFA) reform

By: admin|

Whilst today’s announcement provides further details there is still much to be resolved. As a
result consultation is still ongoing and draft legislation will now not be seen
until after the middle of the year in July or August.

A summary of today’s announcement includes:

  • A ban on insurance commissions within superannuation from 1 July 2013.
  • Insurance commissions outside  superannuation will not be affected.
  • The annual Opt-In renewal requirement has been amended to a two-year Opt-In renewal requirement.
  • A 30 day grace period from the
    anniversary date will be provided to the client and the financial adviser
    should a client not respond to the renewal notice.
  • A ban on any form of payment relating to volume or sales targets from any financial service business to
    dealer groups, authorised representatives or advisers, including volume rebates from platform providers to dealer groups.
  • A ban on soft-dollar benefits, where a benefit is $300 or more (per benefit) from 1 July 2012. The ban
    does not apply to any benefit provided for the purposes of professional development and administrative IT services provided set criteria are met.
  • Introducing a new form of limited  advice called ‘Scaled Advice’, which can be provided by all participants,
    which provides a level playing field. ASIC will be issuing a consultation paper in June/July about scaled advice.
  • The current Intra-Fund class order relief and proposed expansion of Intra-Fund are now under review as
    to whether they are still necessary and whether the Intra-Fund class order relief should be revoked.
  • The Government will explore whether the term financial planner/adviser should be restricted under the
    Corporations Act.

Please read the attached Government release document as per the link below

Source FPA news release 28/04/2011

One thought on “Future of Financial Advice (FOFA) reform

Interested party April 28, 2011, 6:38 am

What a breath of fresh air to read something from somebody who knows what he is talking about.Keep up the good work, Jeff

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