The passing of the Future of Financial Advice (FOFA) legislation by the Senate has not cleared up the confusion surrounding its implementation and timing.

When the Federal Government first sent the legislation to Parliament it set the start date as July 1 2012. It has passed the Senate only 10 days before it was due to come into law, leaving its implementation unworkable.

To make FOFA functional the Australian Securities and Investments Commission (ASIC) must provide guidance on its implementation.

This advice is unlikely to be released before the end of the year, and ASIC will not release a code of conduct for financial advisers until some time next year.

To cope with the situation the Government has allowed FOFA to be implemented on a “soft start” basis, with compliance voluntary from July 1.

Financial Planning Association CEO Mark Rantall says most of his 8000 members “already operate on a fee-for-service basis and put their clients’ best interests first”, so they will be unaffected by the “soft start” date.

“If I was ASIC I wouldn’t be expecting too many phone calls,” Mr Rantall said.

However, increased ASIC powers that accompany the FOFA legislation will apply from July 1.

These include the ability to ban people from acting as investment advisers where ASIC suspects they are likely to contravene their obligations through incompetence or bad faith.

Unanswered questions around the FOFA legislation include whether the Federal Government will legislate on the definitions of “financial adviser” and “planner”.