A motion moved by Senators Dastyari (ALP) and Whish-Wilson (Greens) for the disallowance of the Corporations Amendment (Streamlining Future of Financial Advice) Regulation 2014 was late Tue 15.7.2014 defeated in the Senate by 34 votes to 31.
Those regs will now stand although the Government has announced that, following discussions it had with the Palmer United Party, it will make further regs within 90 days to ensure the following requirements in the Corporations Act 2001 are explicitly listed in the Statement of Advice (SoA) provided by financial advisers to their client and signed off by both:
- that the adviser is required to act in the best interest of their client and prioritise their client’s interests ahead of tl1eir own, consistent with the requirements in subs 961B and 961J of the Corporations Act 2001;
- that any fees be disclosed and that the adviser will prmri.de a fee disclosure statement annually, if the client enters into, or has entered into, an ongoing fee arrangement after 1 July 2013 (this is already required under our amended financial advice laws);
- that a client has the right to return financial products under a 14-day cooling-off period in accordance with the requirements currently provided under Div 5 of Pt 7.9 of the Corporations Act 2001; and
- that the client has the right to change his or her instructions to their adviser, if for example they experience a change in their circumstances.
The Government said it will also reflect those changes, as required, in amendments to the actual legislation currently before the Parliament, the Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014.
[LTN 135, 16/7/14]