The ban on risk commissions for individually advised insurance inside super, and the provision of scaled advice appear to be two of the key areas of focus for the Parliamentary Joint Committee (PJC) inquiry into the Future of Financial Advice (FoFA) reforms.
Meeting in Sydney this week, the PJC called on key industry stakeholders to provide further information regarding their submissions to the inquiry.
… the PJC is focused on a small number of issues
Similar questions were asked of many of the stakeholders, indicating the PJC is focused on a small number of issues arising from the proposed legislation.
Committee member and Shadow Financial Services Minister, Senator Mathias Cormann, was particularly interested in determining the industry’s position on the banning of risk commissions for all group insurance products inside super, regardless of whether the client had been individually advised.
Witnesses were also asked to provide their opinion on the wording of the best interest duty, and, in particular, whether it restricted the provision of scaled advice.
Additional consistent lines of enquiry have included:
- Whether the reforms package would have a negative impact on jobs within the advice sector
- Whether the implementation date of the reforms should be delayed
- Whether Treasury should undertake further Regulatory Impact Assessments
- The cost implications of the annual fee disclosure statement
In a statement released ahead of the hearings, Senator Cormann made his position on the reforms clear by saying FoFA, in its current form, would impose excessive and unnecessary additional red tape, which would push up the cost of financial advice:
“The parliamentary inquiry into Labor’s FoFA Bills… provides an important opportunity for all stakeholders to expose the many flaws in the current legislation and to help force the government to make some necessary changes before it is passed by the Parliament.”
The PJC is due to present the results of its review on 29 February.
