FoFA

Last week the Federal Government introduced its Future of Financial Advice (FoFA) reforms aimed at improving the practise of providing financial advice. The measures adopted by government and driven by Financial Services & Superannuation Minister Shorten signals the beginning of the end of conflicted remuneration in our industry, a system that distorts income movements for finance workers according to whether they meet targets to sell finance products, including products that may not be in the customers’ best interests.

Your union has written to employers in our industry about the impact of these reforms and to commence discussions about how the reforms will be implemented ensuring that the transition to more sustainable remuneration structures benefits members.

National Consumer Credit Protection Act (NCCP)

The Government has also tabled its Credit Cards and Home Loans Bill in parliament as part of its National Consumer Credit Protection Act. The bill is designed to restrict offers of unsolicited credit card increases, while making home loan and credit card contracts easier to understand for consumers.

Media reports this week indicate that this reform to the Consumer Credit Act may result in individual finance workers facing heavy civil and criminal sanction if found to have breached the requirements of the new law. Here is the report in The Australian newspaper. 

Your union is seeking clarification from Treasury and the Government about what the intent of the law is, advocating that any penalties arising from a breach of the Act can and should only apply to the licensee or employer whose responsibility it is provide proper resourcing (staffing) and training of employees to comply with the new laws.

I will keep you informed of developments on both the FoFA and NCCP developments.