The Government will continue its conversations with cross-bench Senators regarding its proposed Future of Financial Advice amendments, Senator Mathias Cormann has vowed.
Despite suffering a significant blow in the Senate last week, Senator Cormann said the Government remained committed to its reforms.
“We will continue to work to ensure we have a robust but also an efficient financial services regulatory system, which is competitively neutral so that people saving for their retirement or managing financial risks through life can access high quality advice they can trust and which is also affordable,” Senator Cormann said in a statement issued immediately after the disallowance vote.
Reiterating his commitment this week, the Senator told ABC Radio National’s Fran Kelly that the Government still believed it could achieve the right balance between strong consumer protections and increased access to high quality, affordable advice.
“These are changes that we took to the last election and no colleague has approached me suggesting that they no longer support those changes which we took to the last election. Really what we are focused on is removing unnecessary and costly red tape which pushes up the cost of advice for people across Australia who are saving for their retirement,” Senator Cormann said.
The Finance Minister and Acting Assistant Treasurer said the Government would return to discussions with relevant cross-bench senators to “see as to what extent there is common ground for sensible improvements”.
In an earlier interview with Chris Uhlmann, which occurred the day after the disallowance vote, Senator Cormann highlighted that the Senate had previously supported the Government’s FoFA reforms, on two separate occasions.
“We now have until 30 June, given the transition period that ASIC has put in place to continue the conversation and obviously the Government will continue to make the case as to why good public policy reform in this area is important in the public interest and in the consumers interests,” Senator Cormann told Mr Uhlmann.
The Bill to enact the Government’s FoFA amendments remains on the agenda for debate by the Senate.
I appreciate the Senators commitment but the reality is that FoFA in its original guise is the reality we are now living with. It would seem unlikely that there is much chance of significant amendment as common sense went out the window ages ago when this became a debate based on ideologies and politics. Changes I hope for include clarity around the ability for planning practices to change license or have their own AFSL and getting rid of the ‘opt in’ requirements. But I’m not optimistic.
It seems to be the same merry go round cycle where Government and big business takes advice from all quarters, gets legal and compliance advice, whose purpose is to take sound advice and turn it into legalistic terminology that now no-one fully understands, though they do make sure it is pushed through, in order to save us all from disaster and when the red tape turns into a maze and the very thing that was supposed to save us, now because of it’s complexity, means more people lose their savings, which in turn, leads to another enquiry, involving legal and compliance to once again save us all, we end up again where we are today, nothing resolved, except that the legal and compliance BILLION DOLLAR EMPIRE strikes again.
In the 27 years I have been a adviser, all this is just another groundhog day and if we continue to let legal eagles spout their mumbo jumbo, which no-one understands, then nothing will change.
Couldn’t agree more Jeremy – well considered! BUT, mate, you have to learn about ‘full stops’!! My head hurt reading your first paragraph, ah, I mean your first sentence!! Cheers, Brian.
http://www.productivenetworking.com.au/news/some-of-the-truths-about-the-financial-planning-profession/
This is all we can do, keep trying, keep educating !
Sitting through a presentation last year by Onepath at one of their product updates. I’m not certain of the exact number, whether it was $100M or $150M, but that was the cost for their organisation to become FOFA prepared. And, the presenter added, none of this improved the product one bit from the customer’s perspective. I remember thinking at the time, wow, that’s a lot of money and wondered what the total cost to the industry was when you multiplied big numbers by the number of product manufacterers, licencees etc etc.
Until such time as politicians, journalists and economic ‘experts’ understand the distinction between financial advice and financial products – our industry will continue to be the ‘whipping boys’ for every failed product (e.g Timbercorp, Great Southern, Westpoint) and market downturn (e.g. GFC).
Just because a financial product or investment strategy fails – that does not automatically mean the financial advice was poor. But as successive Governments have done nothing to reign in financial product manufacturers – or scrutinize the various bodies (e.g. ASIC, ATO, Research Houses & Dealer Groups) that have to vet these products BEFORE an adviser can recommend them to clients – then we’re on a hiding to nothing.
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