13 April 2012

The Future of Financial Advice legislation will come into force on 1 July 2012 which will implement the majority of the recommended reforms to the Australian financial services industry. Two of the most significant reforms are: (i) the  introduction of a statutory fiduciary duty so that financial advisers must act in the best interests of their clients, subject to a ‘reasonable steps’ qualification, and to place the best interests of their clients ahead of their own when providing personal advice to retail clients; and (ii) A prospective ban on conflicted remuneration structures including commissions and volume based payments, in relation to the distribution and advice of retail investment products including managed investments, superannuation and margin loans. We urge all clients and prospective clients of financial advisers to ensure they understand the impact of these reforms. Relevant information can be found on the Commonwealth Treasury’s web site : Future of Financial Advice.