In an unexpected U-turn, Australian policy-makers have decided to reject the repealing of the just recently deployed Future of Financial Advice (FOFA) rules applying to all Australian financial advisers, intended to protect retail investors in the advisory and discretionary broking space.
Parliamentary debate came to a crescendo in an a rarely seen late evening sitting, where a 32-30 vote ensured currently active government changes would be scrapped. The vote effectively means financial planners will have to contact their customers and obtain permission/authorisation for trading activity to be legitimate.
The incumbent Liberal government was aiming to repeal the FOFA regulations and make financial advisory services more laissez-faire, or in other words, operate under less bureaucracy. However, such intentions have attracted unscrupulous market operators seeking to take advantage of looser disclosure measures.
Regardless of the political reasoning behind this most economic of issues, the fact remains that the advisory industry in Australia now faces a scramble to comply with the roundabout turn embarked upon by MPs.