With FOFA legislation due for debate in the Senate next month, the Opposition’s spokesperson on Financial Services has provided details on what FOFA would look like under a coalition government.
Speaking at an Association of Financial Advisers Budget reply lunch, Senator Mathias Cormann said the 16 recommendations that coalition members made on the Parliamentary Joint Committee (PJC) inquiry into the Future of Financial Advice (FOFA) have been formally endorsed by the shadow cabinet and coalition party room.
The recommendations formed the basis for proposed amendments during the House of Representatives debate on FOFA, said Cormann, but were voted down, although they will be carried forward as coalition policy to the next election.
“No ifs, no buts, we will remove opt-in,” said Cormann. “We think it adds unnecessary complexity, unnecessary red tape and unnecessarily increases costs for both consumers and small business financial advisers.
“We will seek to simplify and streamline annual fee disclosure requirements, which will of course continue to get messier and messier with every iteration of new documentation that comes out of the government.
“We will improve the definition of best interest duty and will ensure there us clarity around the provision of standard advice and we will further refine the ban on commissions on risk insurance inside superannuation,” Cormann said.
Deferral of FOFA implementation has also been supported by the coalition, on the basis the timeline has not been appropriately managed to handle structural impact on the financial services industry, Cormann said.
“This is supposed to come into effect July 1, 2012. That’s five weeks away,” said Cormann.
“The legislation still hasn’t gone through the Senate, and the Senate is not sitting until the last fortnight in June, so the earliest this could go through the Parliament is the last weeks of June for something that is supposed to take effect July 1, 2012.
“It demonstrates the absolute incompetence and lack of capacity to manage anything by this administration,” Cormann said.