THE Financial Services Minister, Bill Shorten, is considering delaying the government's plan for an overhaul of financial advice, amid industry claims the proposed starting date of July is unworkable.
Under its Future of Financial Advice reforms, the government will ban advisers from receiving commissions and require clients to approve their adviser's fees every two years.
Financial planners complain that many of the changes are too complex to be introduced by July. The Australian Securities and Investments Commission said last week it may overlook inadvertent breaches during the first year of the reforms.
But amid intense industry pressure, Mr Shorten's office has signalled that he might delay the starting date for the reforms. A decision will be made next month.
"The minister is open to considering whether further transitional arrangements are required beyond what ASIC signalled in the last few days. We expect to have more say in mid to late January," a spokesman for Mr Shorten said.
The signs of a delay come amid claims from financial planners that introducing the changes by July would be impossible, due to the extensive administrative changes and the fact legislation is still before Parliament.
It is understood the government believes some of the industry arguments for a delay are legitimate. It is also keen to avoid any unintended consequences caused by moving too quickly.
The director of policy at the Financial Services Council, Martin Codina, said Mr Shorten's comments were encouraging. He said the reforms should be pushed back until July 2013.
"The minister's comments that the issue of transition will be resolved in January are very encouraging, particularly given the legislation is unlikely to pass through Parliament until April or May of next year," Mr Codina said.
"It will not be possible for the industry to be compliant with these significant reforms only two to three months after the legislation has passed - particularly as much of the detailed requirements will be outlined in regulations which are yet to be released."
The reforms are linked to an overhaul of superannuation - which does not take effect until July 2013 - and will make major changes in how advisers are paid. They also include new rules requiring advisers to act in the best interests of clients.
Financial services firms have complained about having to make two changes to their computer systems in the space of one year, and Mr Cortina said the delaying the starting date of the reforms until July 2013 would avoid duplication in the industry.
Legislation for the shake-up is currently before two parliamentary committees, which are not due to report back until February and March.
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Michael West, Page 2