Amendments to the Future of Financial Advice Bill 2011 tabled by Minister for Financial Services and Superannuation Bill Shorten today in Parliament include significant exemptions to the opt-in rule.
Under the amendments, opt-in, which requires planners to re-sign contracts with their clients on a regular basis, will not be required where a planner is a member of a professional body.
It will also not be required where the advice body has an approved professional code of conduct, and where ASIC has provided a class order excluding them from the requirement.
Financial Services Council chief executive John Brogden said the amendments failed to provide certainty for consumers and financial advisers and therefore the Council will not support it.
Brogden said the Government had walked away from the centrepiece of its reforms by dropping the requirement for advisers to adhere to the opt-in reform.
"Our concern is that the legislation leaves it to ASIC to administer opt-in without any certainty as to what they require to provide an exemption and what the professional standards will be," he said.
"Under a last minute deal between the Financial Planning Association and Industry Super Network, the Government has dropped the requirement for opt-in but will not give any certainty to consumers and advisers on the operation of the Best Interest Duty and scaleable advice."
Opposition assistant treasury spokesman Mathias Cormann said the amendment does not remove opt-in and it does not remove unnecessary uncertainty, red tape and costs for financial advisers or consumers.
"The Shorten opt-in amendment gives significant new responsibilities to ASIC by giving them the power to make the decision on who should be forced into opt-in arrangements and who should not be," Cormann said.
"Given the last minute nature of the amendment it is unclear how ASIC would exercise those powers."
Cormann said the Coalition remains committed to the complete removal of opt-in.
"It should be removed entirely because it imposes unnecessary additional costs and red tape for both business and consumers with questionable additional consumer protection benefits," he said.
