The Act to amend the Future of Financial Advice laws has now received Royal Assent. The amendments are aimed at improving the advice provided to consumers and alleviating the unintended consequences since the laws were introduced.
The Corporations Amendment (Financial Advice Measures) Act 2016 (Cth) (Act), which incorporates amendments to the Bill which were passed by the Senate in November last year, received Royal Assent on 18 March 2016. The Senate amendments removed many of the changes in the Bill originally passed by the House of Representatives in August 2014 which were aimed at streamlining and limiting the operation of Future of Financial Advice laws in Part 7.7A of the Corporations Act 2001 (Cth), and made other minor and technical amendments.
In summary, the key changes implemented by the Act include:
- extending the time frame for opt-in notices and fee disclosure statements to be received by a client from 30 days to 60 days after the client’s renewal notice day or disclosure day;
- treating basic insurance products and non-cash payments (such as travel money cards) consistently with other simple financial products;
- ensuring that the existing client-pays and intra-fund advice provisions operate as intended;
- broadening the ‘education and training’ provision to include education and training that relates to the carrying on of a financial services business; and
- providing that the Regulations may prescribe circumstances in which all or part of a benefit is to be treated as conflicted remuneration (to address any future unintended consequences in relation to the conflicted remuneration provisions).
See media release dated 2 March 2016.
The Takeovers Panel has also announced amendments to Guidance Note 13 Broker Handling Fees which reflect that broker handling fees appear to fall under “conflicted remuneration” following the passage of the Act.
See also the Panel’s media release dated 9 March 2016.