Grant Holley (pictured), founder of Melbourne-based financial services boutique Holley Nethercote, told Lawyers Weekly the firm is enjoying a “reasonably substantial spike in activity” thanks to FOFA and does not expect a slowdown now that the legislation has taken effect.
The firm’s clients, which include Westpac, NAB and ANZ, as well as a range of advisory firms, require such a high volume of legal advice around FOFA that some have even poached Holley Nethercote lawyers to boost their in-house legal teams.
“Our clients had an increased need for internal legal staff to cope with FOFA [and] found a couple of lawyers in our firm,” admitted Holley.
Gadens Lawyers is also enjoying an uptick in advisory work since FOFA’s official start date.
Mark Skinner, head of the firm’s banking & finance division, said he is currently working with corporates, many with substantive in-house FOFA teams, to interpret the operational aspects of the law and help them roll out training of financial advisors.
“The big principles are all understood,” he said. “It’s very technical now, around what financial advisors can say, how to train them better, what’s the best option in a set of given circumstances ... we’re down to day-to-day training now and what that will look like.”
Firms are also warning their clients to expect heightened scrutiny by ASIC, including the possibility of investigations, following the announcement in June that the watchdog would be subject to a broad-ranging inquiry into its functions and performance.
The regulator, on the other hand, is playing down its enforcement approach to FOFA. ASIC says it will adopt “a measured approach where inadvertent breaches arise or systems changes are underway, provided industry participants are making reasonable efforts to comply”.
But this hasn’t stopped firms hammering home to their clients the litigation risks associated with FOFA.
Allens, for example, warns clients not to rely on ASIC guidance, citing case law that appears to demonstrate that adhering to the guidance does not restrict aggrieved investors from launching legal action.
The firm also cautions that compliance with the ‘safe-harbour’ protections under the legislation will not absolve advisors from liability for any given piece of financial advice.