The Financial Services Reform Bill, introduced into Federal Parliament last Thursday, contains few surprises. For brokers in particular, most of the important points they lobbied for are contained in the legislation.

In a note to brokers, NIBA CEO Noel Pettersen said he was “delighted that many of NIBA’s suggestions have been taken up”.

The decision to stick with the requirement for brokers to disclose their commission on risk insurance products has been generally welcomed, although the Financial Planners Association has noted its “concern” at this aspect. Insurance Council Executive Director Alan Mason said insurers have emphasised in their discussions with the Government that there are “some differences between insurance policies covering homes and cars and other more complex financial products”.

Particularly pleasing to intermediaries will be the failure of lawyers and accountants who provide financial advice to avoid the licensing standards. The only people specifically excluded from the licensing arrangements include those engaged only in dealing with claims or settling claims, and those doing work of a kind normally done by clerks and cashiers. State Government’s statutory schemes – including workers’ comp and CTP – won’t be subject to the FSRB arrangements, even where brokers are involved.

Law firm Clayton Utz said that while legal advice given by lawyers in their professional capacity is now specifically excluded in the Bill, “the issue of whether all activities ordinarily engaged in by lawyers in respect of financial services and products are excluded, is not clear.”

Such aspects are likely to be clarified in the regulations now being prepared by Federal Treasury. Ernst & Young’s financial services expert in Canberra, John Hanks, said much of the legislation’s fine print will be left to ASIC.

“There’s a lot of detail still to work through,” Mr Hanks said. “There are missing bits. We’ve got the centrepiece, now we’ve got to dress it.”