With government negotiations with the Palmer United Party (PUP) and the other new crossbench senators underway, the finance minister told InvestorDaily that if the upper house chooses not to pass the amended legislation, then the Coalition may instead seek to broaden the requirements of FOFA beyond retail financial planners.
The finance minister said that the exemption to opt-in and retrospective fee disclosure requirements for industry funds – secured in what Senator Cormann described as a “special deal” struck with former financial services minister Bill Shorten – may well come under the knife in the “interest of competitive neutrality”.
“This is not a threat but a likely consequence of any decision by the Senate to reject our decision to cut unnecessary and costly red tape which pushes up the cost of advice for investors without proportionate improvements in consumer protections,” Senator Cormann said.
“Our preferred course of action is if opt-in and retrospective fee disclosure are scrapped altogether, but if the Senate decides that they should stay, then I think they should stay for everyone providing and charging for advice on the same basis.”
Senator Cormann said he is looking forward to the negotiations and to the interest taken in the issue by the new PUP and micro-party members.
He also reiterated the government’s longstanding position that a desire to make financial advice services more accessible lies at the heart of its amendment agenda.
“If those regulations are disallowed, Labor’s excessive red tape which is unnecessarily pushing up the cost of financial advice will remain in place and make access to high quality advice less affordable for people across Australia,” he said.
