The Federal Government has given itself an escape clause on the implementation date of the Future of Financial Advice (FOFA) reforms.

In an explanatory note accompanying the second tranche of the legislation, Treasury and the Australian Securities and Investments Commission (ASIC) will “devise an implementation strategy”, according to the notes.

“There will be an appropriate implementation period,” the note says. “The ban on conflicted remuneration structures may be progressed in phases.”

But also in the notes is the comment that “further public consultation on any draft legislation implementing the recommendations is also envisaged prior to introduction of the bill into Parliament”.

It would seem Treasury forgot to remove this statement from the draft bill notes, as the second FOFA bill is now firmly in Parliament.

Industry critics say this “cavalier approach” to implementing the reforms is causing considerable uncertainty on the future plans of both advisers and companies. 

There is now a growing chorus of opposition to the FOFA implementation date of July 1 next year.

With no legislation passed, and bills bogged down in Senate committees that will not be reporting until early next year, the financial services industry says there is not enough time to make the changes to systems and test them before going live.

Opposition financial services spokesman Mathias Cormann has called for the Government to delay the implementation date saying there is insufficient time.

He says the Government will focus on the Budget during April and May, which will delay the bills passing through both houses.

There is still a third FOFA bill to come that will probably go to the two parliamentary committees looking at the first two bills.

In a submission to the Parliamentary Joint Committee on Corporations and Financial Services, Professional Investment Services Group MD Grahame Evans said the implementation date should be delayed for 12 months after the bills are passed.

This would “ensure the industry has sufficient time to make the necessary changes and meet its legal and regulatory obligations”, he said.

This move was also supported by Associated Advisory Practices in its submission to the committee.

The second bill does not say what the cost will be for the financial services industry to implement FOFA, but it does note there will be “no significant financial impact on Commonwealth expenditure or revenue”.

Assistant Treasurer Bill Shorten has remained conspicuously quiet on the implementation date and the amount of time left for the industry to implement the reforms.

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