The Minister for Financial Services will examine the views expressed at this week’s public hearings into the Future of Financial Advice (FOFA) reforms but remains determined to push ahead with industry changes.
Ahead of today’s Parliamentary Joint Committee (PJC) meeting into the Corporations Amendment to the Future of Financial Advice bill 2011 and the Corporations Amendment to further the Future of Financial Advice Measures Bill 2011, a spokesman for Bill Shorten said the views of industry stakeholders were on his radar.
“The Minister will monitor the views of stakeholders but we are determined to proceed with the reforms,” the spokesman said.
The PJC will spend the next two days hearing evidence from representatives of industry participants, such as AMP Financial Services; the Association of Financial Advisers; Financial Services Council (FSC); Financial Planning Association; ANZ Wealth; Treasury and ASIC.
FSC chief executive John Brodgen, who will be addressing the PJC later today, said while the council believes the majority of the FOFA package will improve access to financial advices for Australians, it had reservations regarding elements of the reviews.
“As an industry, we want higher standards for financial advisers, we want a best interest duty which puts the consumer’s interest at the heart of the adviser/client relationship, and we want to see the end of remuneration structures which distort advice,” Brogden said.
“However, there are aspects of FOFA which risk putting this advice out of reach for too many Australians.”
The areas of concern for the FSC include aspects of the best interest obligation; the best interest duty; the application of the conflicted remuneration ban to a subset of general advice; issues around limiting the scale discounts a platform/super trustee can negotiate with a fund manager for the benefit of its investors; the lack of adviser charging flexibility for non-MySuper members; and any retrospective application of the legislation.
Weighing into the debate, federal opposition assistant treasury spokesman Mathias Cormann told InvestorDaily: “The PJC inquiry is a very good opportunity to help expose the many flaws in Labor’s current FOFA bills and to force the government to make some necessary changes.”
He said what is needed is “sensible reform” which not only improves transparency, professionalism and competitiveness in the financial services industry but ensures that access to high-quality financial advice remains accessible and affordable.
“The original PJC inquiry into financial services and products, which reported back in 2009, was a very good and widely supported basis for reform,” Cormann said.
