Industry bodies are lobbying hard on the Future of Financial Advice (FOFA) reforms as the carbon tax dominates discussion in the House of Representatives, pushing the FOFA debate to the 11th hour.
“We continue to work with the government and all parties concerned, including the independents, to get sensible reform that is in the best interests of consumers, that is able to be implemented in a practical and sensible way by financial planners,” FPA chief executive Mark Rantall said.
The House of Representatives holds its last sitting tomorrow before breaking until the autumn session in May, when the federal budget is expected to dominate.
Financial Services and Superannuation Minister Bill Shorten earlier this week told reporters in Canberra the government was determined to ensure Australians had adequate retirement savings.
On Monday night, Parliament passed an increase in the superannuation guarantee to 12 per cent from 9 per cent.
“If we are going to create a river of retirement gold, then I want to make sure that people aren’t unduly helping themselves and siphoning off some of that out of people’s accounts through being too expensive or through the provision of poor financial advice,” Shorten said.
“That is what’s motivating our future financial advice reforms.”
However, he said the government was “open to the pragmatic negotiation of implementation details”, acknowledging that the independents and Greens were critical to the vote, which is expected to be tight.
Asked whether he felt the draft laws had to get through Parliament this week, he said: “We will get these reforms done. We will do it in a pragmatic fashion and if it takes a little longer to get from A to B, we’ll do so because we are determined to get to our destination.”
Meanwhile, industry bodies welcomed apparent concessions by the government, including keenly-awaited clarification that the proposed ban on commissions would take effect from 1 July 2012.
“Clearly, we welcome the concessions that have been announced by the government, specifically the delayed implementation timeframe and not forcing retrospective disclosure on commissions,” Rantall said, adding it would not affect the FPA’s ban on commissions, which takes effect in just over three months.
Association of Financial Advisers chief executive Richard Klipin lauded the government’s “common-sense” approach.
“In the next day or so, I suspect we’ll get a far better idea of what that common sense actually looks like,” Klipin said.
However, the government is determined to keep the opt-in reform and is not expected to clarify the best interest clause as it relates to piecemeal, or scaled, advice.
