The Australian Securities and Investments Commission (ASIC) will release regulatory guidelines on the Future of Financial Advice (FOFA) reforms as soon as possible, says Commissioner Peter Kell.

“ASIC has announced its intention to publish regulatory guidance on various aspects of the FOFA reforms,” he told an Association of Superannuation Funds Australia event in Sydney last week.

He singled out for mention the best interests duty, scaled advice, conflicted remuneration and ASIC’s amended licensing and banning powers.

Mr Kell says no guidance will be issued until the regulator has consulted with the industry about each of the reforms.

“Once the legislation is finalised, we will issue draft guidance for consultation,” he said.

A key focus for ASIC will be scaled advice, because ASIC research “has found that one reason more people don’t get advice is that they want advice about single issues or a limited number of issues rather than a holistic financial plan”.

“Our guidance will address issues such as having to do a fact-find when giving scaled advice, and adviser and client agreement on the scope of the advice.

“ASIC fully expects that scaled advice can be provided in a manner that is consistent with the best interests duty.” 

He says during the first 12 months after the FOFA reforms become law, ASIC will take a “facilitative compliance approach”.

“ASIC will adopt a measured approach where inadvertent breaches arise, provided industry participants are making reasonable efforts to comply,” he said.

ASIC will release the full results of its “shadow shopper” survey on financial advice next month, but Mr Kell has warned the results are “disappointing” and support the move to reform the industry.

“ASIC has supported reform to improve the quality of advice for many years,” he said.

“We supports measures, such as those contained in the FOFA reforms, that will improve the standard of adviser conduct, remove conflicts of interest and improve engagement by retails clients with advisers and advice.”