Future of Financial Advice Update

14 April 2016

The Corporations Amendment (Financial Advice Measures) Act 2016 recently became law.

The main effects of this Act are:

• the time period for giving opt-in notices and fee disclosure statements was extended from 30 days after the relevant date to 60 days after the relevant date
• the modified best interests duty was amended for basic banking products to allow Australian (authorised deposit-taking institution) ADI employees to apply the modified best interests duty even if they give advice about consumer credit insurance (CCI) at the same time as they give advice about a basic banking product and/or a general insurance product (advice about CCI attracts the full best interests duty whether it is provided at the same time as advice about a basic banking product and/or a general insurance product, or separately)
• a non-cash payment facility not linked to a basic deposit product (e.g. travel card) is now treated as a basic banking product
• the basic banking exemption for the ban on conflicted remuneration has been amended to allow ADI employees to receive a benefit relating to basic banking products as well as CCI
• the non-monetary training and education exemption for the ban on conflicted remuneration has been broadened from a benefit relevant to the provision of financial product advice to a benefit relevant to the carrying on of a financial services business; and
• the amendments also include a note giving further detail on the operation of the client-pays exemption for the ban on conflicted remuneration.

Other than the change in time period for opt-in and fee disclosure statements, the amendments set out above formed part of existing Regulations. The Act now embeds them into the Corporations Act. For further information please see the Act and the Assistant Treasurer's media release about the originating Bill.

ASIC will now be closing our dedicated FOFA mailbox and will not be sending out any further FOFA newsletters.

ASIC guidance on FOFA topics is still available from our website

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