Treasury is seeking stakeholder submissions on a Consultation Paper prepared as part of a Post Implementation Review (PIR) in relation to the following five measures enacted as part of the Future of Financial Advice (FoFA) reforms.
- The ban on up-front and trailing commissions and like payments for both individual and group risk insurance within superannuation.
- The requirement for advisors to renew client agreement to ongoing advice fees every two years (opt-in regime).
- The ban on soft dollar benefits over $300 per benefit.
- The limited carve-out for basic products from the ban on certain conflicted remuneration structures and best interests duty; and
- The clarification provided in relation to access to scaled financial advice.
The full consultation paper published by Treasury can be found here.
The SMSF Association would like member feedback on the implementation of these five regulations and how they have impacted your business and consumers. Your feedback will help shape our view to further improvements to the regulations and better align the interests of consumers and regulators.
SMSF Association members can provide their feedback before Friday 9 June 2017 via [email protected]
Consultation questions:
- Have the regulations achieved its intended objective?
- Were there impacts on business other than those identified?
- Were there impacts on consumers other than those identified?
- What were the compliance costs of the announced measures? These costs may include but are not limited to:
- Commissions
- Designing new IT systems
- Training around new compliance requirements
- Designing new remuneration systems
- Opt-in
- Designing and issuing renewal notices
- Training around new opt-in requirements and compliance
- Creating new IT systems to deal with opt-ins and outs
- Soft dollar benefits
- Training on the new regulatory requirements
- Designing IT systems to report and classify benefits
- Creating new remuneration structures in the absence of these benefits
- Conflicted remuneration
- Training for line staff on their responsibilities in regards to the best interest duty
- IT System development
- Additional training required to allow staff to give advice on basic banking products
- Do you have any concerns or comments regarding the impact and operation of the regulation?
- What are your views regarding the regulatory option chosen by the Government compared to the alternative options which the Government could have pursued? What are the key costs and benefits of these alternative options compared to the chosen option?