The FPA works consistently and relentlessly with Government, regulators and the media to represent the interests of our members. The articles below feature key developments in the passing of the Future of Financial Advice Reforms legislation.
29 May 2012
The FOFA Bills are still to be debated and passed through the Senate – though they have been introduced into the Senate on 10 May they have been deferred until the next sitting week, which will be commencing 18 June.
In the interim Treasury have released the first tranche of Draft Regulations for comment. Effectively the regulations provide some clarification on grandfathering of commissions (but not volume rebates and payments), product fees and fee disclosure statements and confirmation that conferences are no longer restricted to Australia/NZ. However, there is still much more to be clarified and explained with further Draft Regulations expected over the coming weeks. Submissions are due 05/06/2012. If you have any comments or feedback please email them to firstname.lastname@example.org
16 April 2012
Our negotiations with Government, the Independents and other stakeholders continued right up to the final moments prior to the reforms passing in Parliament on 22nd March. Not all of our proposed policies were adopted, but we see the legislation as a victory for the profession, consumers and our members. We have produced an 'at-a-glance' summary of the measures that we advocated for and the Government response.
Click here to download the FoFA at-a-glance guide.
FoFA moment of truth for FPA members - the FPA's FoFA analysis
22 Mar 2012
Today is an historic day for you, our valued FPA members, who are Australia’s true financial planning professionals. The FPA welcomes the concessions provided in the Future of Financial Advice (FoFA) reforms, which have been passed by Parliament today.
While the FPA remains opposed to some key aspects of the Bill, particularly Opt-in, we are delighted to announce that we have negotiated some crucial wins for consumers, the profession and in particular, FPA members.
Here is a summary of the highlights of the reforms, explaining the FPA’s wins for our members and their clients:
The FPA continues to oppose Opt-in as a redundant and unnecessary policy, given the removal of investment commissions and the introduction of the best interests duty. From its inception as a one-year opt-in policy, the FPA has successfully fought to:
This is a genuine three-way victory for:
Restricting the use of the term ‘financial planner’ in law
The FPA has spearheaded the need to restrict the use of the term Financial Planner as a key consumer protection measure. Investment Trends research conducted in November 2011 affirmed that 88% of financial planners favour this initiative.
The Government now puts their full support behind the FPA’s move to ensure consumers receive ‘true to label’ advice from professionals who are appropriately qualified and experienced and work to high professional standards.
FPA members are in the best possible position to be captured under the restricted definition of the term ‘financial planner’ which will be tabled in Parliament next year.
Fee disclosure statement requirements
The FPA continues to oppose the requirement for an additional fee disclosure statement, in particular the application to existing clients. The FPA has successfully obtained the following concessions, avoiding the onerous and costly red tape that this would have created:
Note: We are awaiting further clarification through the release of the amended Bill and Explanatory Memorandum on the detail of some of the amendments such as those on fee disclosure statements and the exclusion of trail commissions and insurance premiums.
Best interest duty
The FPA’s suggested improvements have not been incorporated in the Best Interest duty. We remain concerned how scaled advice will work in practice and are disappointed that the FPA’s proposed amendments to 961B(2)(g) and 961B(5) to facilitate the provision of scaled advice were not adopted. Some concessions have been obtained by way of notation which we are currently reviewing.
What difference will FoFa make overall?
FPA members are strongly-positioned to benefit from the final shape of the FoFA reforms. As an FPA member, you already meet higher standards of education and experience than required by law, and you have signed up to a world-class Code of Professional Practice. We are committed to ensuring that our FPA Code of Professional Practice will be approved for the purposes of meeting the class order relief requirement in FoFA.
While the FPA will continue to argue that reform needs to work harder to improve consumer access to advice, the FoFA package passed today will undoubtedly help consumers to more easily understand what advice they’re getting, who they’re getting it from, how much they pay and how they will pay. Importantly, consumers can benefit from greater protections to ensure that they can be confident that their interests are placed first and foremost when receiving advice.
The Senate now needs to pass the FoFA Bill and the FPA looks forward to helping its members transition to the new FoFA environment, which is due to commence 1 July 2013.
Look out in your post over the coming days. We will send you a letter explaining what the FoFA outcomes mean to you in more detail.
How the FPA will support its members?
In addition to our continuing advocacy efforts, the FPA - in consultation with our member-based Education and Marketing Committees - is developing a set of practical tools to support members in the transition to a post-FoFA world. The members-only Toolkit is due for launch in April. It will feature useful resources to especially benefit smaller practices and content that practitioners won’t find from other sources. FPA members can also take advantage of a range of high quality online CPD sessions free of charge.
FPA does not support Opt-In
21 Mar 2012
There has been much confusion and media speculation about the FPA's position on Opt-In. To be totally clear the FPA has never and does not support Opt-In. We have worked for many years with many stakeholders to get Opt-In removed along with other sensible concessions like a 12 month transition period, removal of additional disclosure requirements and sensible Best Interest amendments to allow for scaled advice.
We are continuing to work on those concessions and more on your behalf even as the legislation is being debated. We cannot guarantee the final outcome as that is in the hands of the Government and the Independents but we will continue to fight for what is in the best interest of members and the profession. That includes the removal of Opt-In.
Please read our ongoing correspondence for further updates.
FOFA Races to the finish line - a message from FPA CEO Mark Rantall
21 Mar 2012
The moment of truth is imminent for Australia’s financial planners with the FoFA reforms currently being debated in Parliament, and an outcome due by the end of the week.
As we approach the final hours, we continue to work with the Minister’s office on the ultimate shape of the reforms put to the vote. We can also say that in the past few days, we have seen a host of options proposed to us by a range of parties. We have negotiated some important concessions for you, our valued members, including a 12-month transition period and some relief on additional disclosure. We want to be clear with FPA members that the only discussions which will deliver an outcome are those with the Government, Opposition and Independents.
Through all of this, the FPA positions on FoFA have not changed and we remain unwavering in our resolve to use the full weight of our influence to achieve the best outcome for our members and their clients. Clearly the Government has ultimate control over what concessions are granted, however, we want you to know that we are working hard to negotiate the best outcome for you. Read the letter we have sent to the Independents on our views here.
Our efforts over the years have involved working with all stakeholders in the political process, including ASIC and the FSC, ISN, ICA, CPA, IPA and SPAA. You may have seen media reports in the past 24 hours suggesting that the FPA has negotiated a deal with the Industry Super Network (ISN). The FPA has had dealings with the ISN not just recently but throughout the past 3 years since the reform process began. We have sat in the Peak Consultation group and countless forums with the ISN debating our position on your behalf.
As a valued FPA member, please remember that in any discussions with the ISN or any other stakeholder, our sole purpose is to unite the profession and achieve the best possible outcome for our members and their clients.
We will provide you with further updates and detail as the Parliamentary debate concludes and the vote is held. We thank you, our valued members, for your continuing support and give you our firm guarantee that we will to continue to fight hard on your behalf.
FoFA Win for financial planners
15th Mar 2012
The FPA has welcomed the Hon Bill Shorten’s announcement that the mandatory application of the FoFA reforms will start from 1 July 2013.
We believe this is a great outcome for common-sense; the FPA has consistently lobbied the government for the one-year transition and welcome Minister Shorten’s announcement. We believe a one-year transition will allow all financial planners the time needed to implement these reforms in a transparent and efficient way for the benefit of all Australians.
The FPA’s recommended changes for FoFA are:
FPA disappointed with SEC report on FoFA
15 Mar 2012
The FPA has today called on Government to take industry recommendations into account when debating the FoFA bill in Parliament in the coming days. This announcement follows disappointment in the recommendations outlined in the Senate Economics Committee (SEC) report on FoFA, tabled to the Senate today.
Mark Rantall, CEO of the FPA said:
“The original intent of FoFA was to improve transparency of, and access to, financial advice for all Australians. This is an effort that the FPA has consistently supported throughout all discussions with government and, whilst we have welcomed the opportunities to present our recommendations on behalf of our members and consumers, we believe the SEC has missed an opportunity to recommend improvements that would deliver on the consumer protections and benefits that FoFA was originally intended.”
"It is disappointing that, whilst many industry representatives have spent considerable time throughout the inquiry recommending amendments to enable FoFA to meet consumer's best interest, most of this insight has not been reflected in reports tabled to government.
"The FPA has been very consistent and clear about what amendments we feel are needed to better FOFA and actually deliver on the intent and objectives. We have more recently provided these key amendments via individual letters to each MP as parliament prepares to debate the respective FOFA bills during this sitting period. We hope that, whilst key industry recommendations have not been considered in the PJC or SEC reports, they are taken into account during the government debate on FoFA in the coming days.
Our recommended amendments continue to include:
“Notwithstanding the limitations of both the PJC and SEC reports, the FPA will continue to raise professional standards on the journey that we embarked upon well before the FoFA reforms were initiated in 2010. The year prior, we approved a new remuneration policy to remove investment commissions and improve client disclosure which will come into effect on 1 July 2012. And also since this time, the number one principle in the FPA Code of Professional Practice requires members to place the interests of their clients ahead of their own; and FPA practitioner members all work to higher professional standards than required by law.”
"The original intent of FoFA was to improve financial advice for all Australians. We believe the FPA has kept to that intent and we hope that this is what the government delivers on."
PJC Falls Short on FoFA reforms
1 Mar 2012
The PJC Report was tabled into Parliament by the Chair of the Committee, Bernie Ripoll MP listing 15 recommendations. The FPA has announced its dissapointment with the recommendations outlined in the PJC report.
Market volatility is here to stay and regulatory reforms are a certainty - hear what Mark Rantall has to say on how you can navigate the pitfalls and potentials of the year ahead.
PJC FoFA Public hearing
23 Jan 2012
The Parliamentary Joint Committee (PJC) met at the New South Wales Parliament House to discuss amendments to the Future of Financial Advice (FOFA) reforms.
FPA Supports Super Funds Inquiry
20 Jan 2012
The Financial Planning Association (FPA) has welcomed a government announcement for the Productivity Commission to conduct an inquiry into default superannuation funds in modern awards.
FoFA Submission to PJC Inquiry
22 Dec 2011
The FPA is committed to positive legislative reform that improves consumer protections and supports the development of improved professionalism and accessible financial advice for all Australians.
For inquiry and report
22 Dec 2011
Corporations Amendment (Future of Financial Advice) Bill 2011 and Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011 for inquiry and report. Read more.
Future of Financial Advice Bill Tranch 1 and 2 Update
12 December 2011
This update is a great summary of the FoFA Tranche 1 and 2 to date.
Intra Fund Advice – Update
8 Dec 2011
Minister for Superannuation and Financial Services, the Hon Bill Shorten MP has announced new rules that superannuation trustees have to comply with to ensure intra-fund advice is provided in member's best interest and at a reasonable cost.
The Hon Bill Shorten MP - Address at the 2011 FPA National Conference [31 minutes]
17 Nov 2011
The Hon Bill Shorten MP acknowledged the influential and pivotal role of the FPA in informing the legislation. His speech articulates a vision for Australia, the role of financial advice and the FPA’s “instrumental” position in helping to shape the reforms.