Early responses praise FOFA draft bill
Industry associations and insurers have generally welcomed the draft Future of Financial Advice (FOFA) legislation, which was announced this morning by Assistant Treasurer Bill Shorten.
Financial Planning Association CEO Mark Rantall has welcomed further clarity on elements of the reforms, but says he is disappointed the opt-in proposal has been retained.
“We have led the way on reforms proposed within the FOFA legislation – including the introduction of a best interest duty and a banning of commissions on investments,” he said. “These initiatives effectively make opt-in a redundant policy option.”
MLC Group Executive Steve Tucker says the reforms detailed in the draft legislation “will achieve the Government’s objective of building confidence and trust in financial advice”.
“The Government’s announcement today provides important clarity which will enable the industry to get on with implementing the reforms and operate under a consistent framework,” he said.
Mr Rantall also welcomed modifications to the ban on life insurance commissions with superannuation, which is restricted to MySuper/default funds and group schemes, while also making the bans prospective rather than retrospective.
“Limiting these bans will mean that personally advised consumers at least will not be disadvantaged,” he said.
“We remain vigilant to the needs of members of these funds and the process for servicing their insurance requirements.”
Mr Tucker says the new guidelines on life insurance commissions are better than the original proposals.
“We believe it is a good outcome for consumers and the industry that the Government… has revisited the ban on individually advised insurance within superannuation,” he said.