Many decisions made as part of the federal government’s advice industry reform agenda had caused confusion, the FPA said at yesterday’s Parliamentary Joint Committee (PJC) hearing.
“The process of the reform agenda was never documented and many decisions were made that caused much confusion to the FPA and the consultation group in general, especially as to how and why certain decisions were made,” FPA chief executive Mark Rantall said during the hearing in Sydney.
Rantall used as a key example the decision to amend the fee disclosure statement from originally only applying to new clients in the draft legislation to then applying to all clients in the current legislation.
The FPA offered up the expansion of opt-in from within the MySuper framework to all financial advice as another example.
“The reality of the situation is we now have legislation before Parliament that we don’t fully agree with. We believe we’ve outlined the areas that we don’t agree with the legislation or draft legislation. However, having said that, we agree with the vast majority of FOFA reforms,” Rantall said.
FPA general manager of policy and government relations Dante De Gori added further comment, saying many of the discussions the FPA had held with Treasury consultation groups had not impacted on the FOFA bills.
“I think the consultation process has been very thorough and has been ongoing with respect to Treasury, but as we mentioned in our opening address, many discussions we’ve had in those consultation groups have not necessarily resulted in the decisions transcribed today,” De Gori said.
“The fee disclosure was one in particular that was a case in point which wasn’t talked about, so our position had been settled in respect to the exposure draft and then that changed when we received the actual legislation, which was different and there was no consultation in the middle of that.”
The FPA also said that having no appropriate regulatory impact analysis conducted by Treasury on the cost implications of the reforms to the industry or consumers had been a fundamental flaw in the legislative process.
As well as questioning the process of industry consultation, the FPA called on the PJC to consider giving legislative support to the advice association’s code of professionalism.
