On December 20, the government announced plans to amend FOFA, including the removal of the ‘catch all’ provision in the best interests duty, the removal of opt-in and changes to grandfathering.
However some consumer titles published reports that claimed FOFA was being repealed, according to FPA general manager of policy and government relations, Dante De Gori, who was quick to clarify the proposed regulatory changes.
“FOFA for me, as it is, the policy intent is true and remains true,” Mr De Gori told InvestorDaily.
“I have seen the consumer press talking about FOFA effectively being repealed,” he said. “For me, that is misleading.
“The only measure in FOFA being rolled backed is opt-in. That’s the only one. The rest are staying, they are just being amended.”
Mr De Gori praised the proposed amendments, saying they benefited consumers and planners in a number of ways.
“They make the policy more workable and practical without reducing or diminishing consumer protection or the policy intent of FOFA, which in my opinion is this: removing conflicted remuneration and providing advice in the client’s best interest, but doing it in a way that enables advice to still be affordable and accessible,” he said.
“No matter what anyone tells you, any piece of regulation increase costs.
“Whether those costs will be reduced over time, we have to wait and see, but in order to assist you need to look at what parts of FOFA are ineffective and costly, and therefore inefficient.
“We feel many of the proposed changes made by the government will help reduce those costs without reducing the effectiveness of the FOFA regime,” Mr De Gori said.
