The Future of Financial Advice and Its Essential Advantages
The future of financial advice (FOFA) is proposed regulatory framework. It is being brought in to improve the quality of financial advice and consumer outcomes as a result of the failures of financial firms in the late 2000s. It enables easier provision of simple advice which can be expected to make financial advice more affordable as well as increase public access and usability.
FOFA will see the removal of the accountant's exemption. Presently accountants are able to provide advice on SMSFs under the exemption provided by regulation 7.1.29A of the Corporations Regulations 2001. Through this FOFA, the accountants can hold an Australian Financial Services License (AFSL) in their own right or being an authorized representative of a licensee.
Many in the financial industry will need to restructure their administrative systems in order to comply with the requirements and will incur transition costs as a result. But however the FOFA reforms will also create new opportunities. This will benefit consumer in enjoying results of the reforms which bring confidence in the industry, in turn, contributing to an increased demand for advice.
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