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GRC Professional : GRC Autumn 2012
26 GRC Professional • Autumn 2012 CASE STUDY thE FinanCial sErViCEs industry has be en g iven another year t o i mplement the FoFa reforms. But the extended deadline has not hindered Westpac’s plans to ensure its financial planners meet the new requirements well before the reforms become mandator y in 2013. since october 2011, Westpac Fin ancial Plan - ning has been operating on a full fee-for-service basis on all new investment, superannuation and retirement products. Mark spiers oversees Westpac Financial Planning. he claims the group has been implementing changes that reflect the ambitions of the government that enacted the reforms: “to restore trust in the financial planning industry and ensure that australians receive qua lit y advice”. How they did it training and support were viewed as vital initial steps to prepare planners for the now highly regulated financial services industry. When the education and training needs of staff had been determined, Westpac Financial Plann ing took the following steps: 1. rev iewi ng its approved Product list (aPl) and remov ing product s that could not operate in a fee-for-service environment because they had inbuilt commissions. some products were put on hold u ntil they could comply. 2. running a comprehensive education and up-skilling program for planners that clearly articulated the value of advice. this training program commenced in May 2011 with planners, practice managers and management (around 160 people) participating. soon after, another 100 pla nners completed the training. 3. Providing improved collateral a nd tools for advisers to use in their client engagement process, including a visual tool for customers and planners to use as the conversation unfolds that captures key information, hopes, dreams, goals, aspirations and financial milestones. 4. Maintaining a back-office reporting environment to support the changes. the education program was run by the Bt Financial Group’s practice management team led by Wes hall. “the training comprised Ready for FOFA Westpac Financial Planning has rolled out its fee-for-service program, complying with Future of Financial Advice (FOFA) reforms more than a year before the official deadline. Find out how they did it and the benefits of early implementation. The flaws in FOFA Even though Westpac has taken steps to implement FOFA reforms early, it recently made a submission to the Senate Economics Legislation Committee highlighting 44 flaws in thedraft rule changes and urgedthe government to postpone the rollout. Inthe submission, Westpactakes aim at theincreasedpowers of ASIC, a growing administrative burden, inconsistent use of terminology and inappropriate penalties for transgressions. The document also questions the role of computer programs in giving advice and whether or not the ‘bestinterests duty’ could be applied in these circumstances. “We have identified a significant number ofissues with the current draft legislation, which could generate outcomes that will not achieve the Government’s stated policy intent, or will result in impractical and costly implementation issues,” the bank said in a statement.
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