The Shadow Financial Services Minister has highlighted the reasons behind the Coalition’s directive to refer the Future of Financial Advice (FoFA) Bill back to the Parliamentary Joint Committee for Corporations and Financial Services (PJC).
Senator Mathias Cormann said that too many of the FoFA consultations have occurred behind closed doors.
Speaking at the AFA’s 2011 National Conference, the Senator said: “Over the last twelve months … there’s been a lot of unexplained chopping and changing.
There’s been a lot of discussion and a lot of negotiations between the Minister and the industry behind closed doors
“There’s been a lot of discussion and a lot of negotiations between the Minister and the industry behind closed doors. I think we’ve got to break that open. We’ve got to make sure there’s proper scrutiny, in the context of a lot of zig-zagging from Minister Shorten.
“From my point of view, I want to make sure all stakeholders are able to explain what they think the impact of FoFA is going to be on consumers and the financial services industry.
“I think the Parliament needs to go down this path with our eyes wide open, and with the enquiry hopefully that is achievable.”
Senator Cormann also raised concerns over the passage of the legislation through Parliament. He said that Minister Shorten’s office was forced to admit it had not followed regulatory ‘best practice’ in the development of the first tranche of FoFA legislation.
During the hearing on 19 October, Senator Cormann asked the Treasury whether a regulatory impact statement for the future of financial advice changes. The Treasury representative admitted that while an impact statement was carried out for the original reforms, proposed in April 2010, no further investigation had been undertaken.
Senator Cormann then asked whether the Treasury had received any feedback from the Office of Best Practice Regulation in regards this issue. The spokesperson responded with: “Yes. We were found to be in breach of the requirements.”
There is currently no reporting deadline for the PJC to provide the findings from their review of the FoFA Bill, however Senator Cormann believes it could be expected as early as Christmas.
