Commenting on the regulations put in place by the Treasury in line with the government’s previously announced amendments to the Future of Financial Advice (FOFA), Investor Daily cited Minter Ellison’s client alert ‘FOFA regulations finally made’ prepared by financial services specialist partner Richard Batten.
The new regulations were finalised on 26 June and commenced on 2 July. The main changes apply to conflicted remuneration, grandfathering, the best-interests duty and ongoing fee arrangements.
A note from law firm Minter Ellison pointed to a number of ‘important conflicted remuneration exemptions’ for general advice and low-value performance bonuses; the extension of the employee exemption by one year to 1 July 2015; the removal of impediments to adviser movement; changes to the best-interest duty; and exemptions from opt-in notices and fee disclosure statements for existing clients.
Under the regulation, the contentious ‘pass-through’ exemption will apply to exempt remuneration, but not to grandfathered remuneration. ‘Although it is a pity this exemption does not extend to grandfathered benefits, it does avoid the need to seek client directions to pass on benefits to advisers,’ said Minter Ellison.