ISA rains on FOFA change parade

This morning, the assistant treasurer, Arthur Sinodinos, issued a statement announcing the changes to the FOFA legislation he will put to the parliament, including the removal of opt-in and changes to fee disclosure and grandfathering provisions, as promised pre-election.

A number of industry stakeholders have issued statements welcoming the announcement.

The Financial Planning Association said the announcement is a “sensible outcome for the financial planning industry and consumers alike” and is in line with the industry’s march towards becoming a “distinct and respected profession”.

“As our members and the wider industry will know, the FPA has long championed changes to ease the cost and red-tape burden imposed by FOFA on financial planners,” said FPA chief executive Mark Rantall.

Association of Independently Owned Financial Professionals (AIOFP) executive director Peter Johnston similarly welcomed the announcement.

“What a lovely Christmas present,” Mr Johnston told ifa. “At last a government and minister that has taken a pragmatic common sense approach to FOFA.”

The Association of Financial Advisers also welcomed the announcement. “These sensible amendments from the Coalition eliminate unnecessary red tape and costs and will help thousands more Australians receive the benefits of life-changing financial advice backed by the safety net of strong regulation that enforces client best interests,” said AFA CEO Brad Fox. 

However, Industry Super Australia – formerly the ISN – wasted no time issuing a statement voicing its displeasure at the announcement.

“Industry Super Australia is today urging the federal government to defer a proposed change of laws designed to protect consumers from conflicted financial advice,” the statement said.

ISA chief David Whiteley urged the government to stick to the “sensible centre” and include the proposed FOFA changes in the scope of the Murray Inquiry.

The previous Labor government made a “number of concessions…to the banks and financial planners”, Mr Whiteley said.

Senator Sinodinos will be expanding on the FOFA changes as well as the Murray Inquiry at an upcoming business lunch in Sydney, sponsored by ifa. To reserve your table or seat click here.