The Self Managed Super Fund Professionals’ Association (SPAA) has today welcomed most elements in the draft Future of Financial Advice (FoFA) legislation describing it as a common sense approach that is consistent with removing market distortions.

“The FoFA reforms are an important initiative for ensuring more Australians benefit from receiving quality advice,” said Andrea Slattery, CEO of SPAA.

“SPAA has been leading the advocacy for the best interest duty requirement to have regard to ‘client’s instructions’ and we are particularly pleased to see that this requirement has now been included. We believe this is paramount if the best interest duty is to achieve the desired outcomes for consumers. 

“SPAA is also pleased to see the Federal Government has reconsidered its decision to ban commissions on individual insurance within superannuation. This measure will remove distortions and will ensure a level playing field for individual insurance policies. This is a positive measure for the SMSF sector.

“While our preference would have been to avoid statutory opt-in obligations, we support the common sense approach announced today to provide greater flexibility in the way these obligations will be enforced, including the ability for advisers to secure their clients’ opt-in through e-commerce arrangements such as the phone or the internet,” she said.

Mrs Slattery said the detail was still pending on a number of critical areas. 

“We understand the Government is still considering a restricted or structured advice licence for accountants who advise self managed super funds.  SPAA has been working hard to ensure the Government understands the importance of a restricted or structured license arrangement, which recognises SMSF accountants may not wish to provide recommendations to clients to purchase specific investment financial products.  We have also been advising on the minimum competencies required to hold such a licence and we look forward to seeing these final details in the second tranche of the legislation,” she said.

“SPAA has been advocating for the removal of the ASIC class order within RG200. We are also advocating for intra fund advice and scaled advice to have the same level of competency and best interest duty requirements as all other advisors.” she said.

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