The coalition remains steadfast in its bid to fight for the removal of parts of the Labor government’s Future of Financial Advice (FOFA) reform package when it is debated in the Senate this month.
Opposition assistant treasury spokesman Mathias Cormann yesterday told InvestorDaily he would put all the coalition’s amendments on areas to improve FOFA to the Senate.
“The FOFA legislation in its current form is flawed,” Cormann said.
“To pass it in its current form would be bad for consumers, bad for small business financial advisers and bad for the financial services industry as a whole.”
He said the legislation’s passage in its present form would unnecessarily increase costs for business and consumers, as well as reduce choice, competition and diversity across the financial services sector.
“Very constructively, the coalition has made a whole series of recommendations on how FOFA can be improved and progressed from here. We will put all those recommendations to the Senate in the form of amendments to the FOFA legislation,” he said.
Given the “magnitude” of the reform changes and costs, it was “imperative that such a proper cost-benefit analysis is done”, he said.
“We remain of the view that the government should be forced by the parliament to conduct a proper regulatory impact assessment – consistent with the government’s own process requirements – before the Senate considers FOFA any further,” he said.
“The coalition will also move amendments to remove opt-in completely, to simplify and streamline the additional fee disclosure requirements, to improve the best interest duty, to provide certainty around the provision and availability of scaled advice and to refine the ban of commissions on risk insurance inside superannuation.”
Asked whether the coalition would scrutinise the passage of the FOFA legislation by the House of Representatives, with particular focus on the last minute FOFA amendment to opt-in, he said: “[Financial Services and Superannuation Minister] Bill Shorten’s last minute amendment negotiated in a secret and exclusive late night session does not solve any of the current problems with FOFA.
“The coalition remains committed to the complete removal of opt-in.”
In late March, the House of Representatives passed the amended Corporations Amendment (Future of Financial Advice) Bill 2011 by a vote of 60 to 56.
The reforms are expected to be debated in the Senate this month.
