Future of Financial Advice (FOFA) Bill

The draft FOFA Amendment Bill has been open for public consultation, with a report expected by 16 June. The main amendments of concern to the general insurance industry are moves to clarify the scope of scaled advice, removal of the ‘catch all’ provision for the best interest duty and an exemption to agents or employees of banks/credit unions/mutuals from adhering to certain steps in the best interest duty obligation when providing personal advice in relation to general insurance products (including consumer credit insurance).

The draft bill is unlikely to pass the Senate before 1 July given the Greens currently hold the balance of power and have stated their opposition to the amendments. However, given Senator Cormann (the acting Assistant Treasurer) is a committed market economist and has a strong understanding of the financial services sector, the Bill is likely to pass once the Coalition regains the balance of power post July.