The release of the federal government's draft financial advice legislation has done little to quell the uncertainty within Australia's financial sector industry, with further question marks over areas of cost and compliance.
Some in the industry are even questioning whether the reform's true intent will be delivered.
In the Association of Financial Advisers' (AFA) view, the first tranche of Financial Services and Superannuation Minister Bill Shorten's Future of Financial Advice (FOFA) draft legislation failed on a number of counts.
"Unfortunately Minister Shorten has failed consumers and he has also failed the rigor and transparency test," AFA chief executive Richard Klipin said.
"The fact that we are now that many months down the track and there is still no research, there is still no evidence, there is still no impact statements, there is still nothing of independent nature that demonstrates quite clearly that the intent of FOFA will be delivered."
Klipin said Shorten was being "very ambitious" when he spoke about what FOFA would deliver.
"I think he uses terms like growth strategy for the industry. 'Where's the evidence, Mr Shorten?' would be our response," he said.
He said the inclusion of Industry Superannuation Network-commissioned Rice Warner research, which priced opt-in at $11 per client, "demonstrates the engendered bias and actually speaks volumes" about whose interests the FOFA reforms benefited.
Opposition financial services spokesman Mathias Cormann said Shorten's approach to FOFA "appears conflicted and unbalanced".
Cormann said the coalition supported the introduction of a statutory best interest duty, however, it did not support "Labor's push" on opt-in.
Minter Ellison Lawyers partner Richard Batten said the FOFA legislation contained a lot more detail than first anticipated.
"We had seen some elements of these measures that were proposed in relation to the procedural elements of the best interest duty, but to see them all in so much detail is unexpected," Batten said.
In respect to the best interest obligation, he said the new regime was much more "prescriptive".
"On the one hand that is positive I suppose in terms of providing quite specific details as what needs to be done as a minimum. On the other hand, as it is very prescriptive there is always the opportunity for breaching any one element whether inadvertently or otherwise," he said.
Association of Superannuation Funds of Australia chief executive Pauline Vamos said the draft legislation's best interest obligation would be a "key driver of re-establishing the trust" between the financial advisory sector and consumers.
"The dismantling of some criminal sanctions around the process of delivering advice will mean that advisers will feel more comfortable in developing flexibility and tailoring the delivery of advice to their clients, rather than being subject to standard forms and standard information to reduce legislative risk," Vamos said.
Henry Davis York Lawyers special counsel Claire Machin said elements of the draft reflected what the firm had been saying consistently.
"Given the amount of the penalties involved in a breach of best duty is sending a significant message that the government is taking this seriously and they obviously want players in the market to do so as well," Machin said.
