Monday, March 26, 2012
The Australian government has announced that its Future of Financial Advice reforms will not become mandatory until July, 2013, stressing that this will benefit the wealth management industry.
The reforms were originally intended to come into force on July 1, 2012. Under the governmentís new plans, the reforms will still officially commence from that date, but the application of the provisions will be voluntary for the following year. Mandatory application will start from July 1, 2013. As a result, businesses wishing to start complying with the reforms from July this year will have to elect to do so.
The FOFA package includes the following:
"The government has listened to concerns from the business and financial planning community that they need more time to prepare for these changes. This timetable also balances consumer needs, as it gives early industry movers the opportunity to provide commission-free products from July 1 2012," Minister for Financial Services and Superannuation Bill Shorten said.
"The revised implementation arrangements will lower industry implementation costs as they will be able to synchronize FOFA and Stronger Super reforms. The FOFA reforms are about making sure more Australians can access affordable and better quality financial advice, free from the conflicts of interest created by commissions and other product payments. These reforms will drive greater competition and innovation and are a long term growth strategy for this important industry," Shorten added.