{"id":25620,"date":"2014-03-24T19:06:46","date_gmt":"2014-03-24T09:06:46","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=25620"},"modified":"2014-04-08T19:55:37","modified_gmt":"2014-04-08T09:55:37","slug":"cormann-calls-a-halt-to-fofa-regulations","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2014\/03\/24\/cormann-calls-a-halt-to-fofa-regulations\/","title":{"rendered":"Cormann Calls Halt to FoFA Regulations"},"content":{"rendered":"

Just days after he took control of the Future of Financial Advice amendments program, Senator Mathias Cormann<\/strong> has announced he will “press pause” on the regulations.<\/p>\n

<\/p>\n

\"\"<\/a>
Acting Assistant Treasurer and Minister for Finance, Senator Mathias Cormann<\/figcaption><\/figure>\n

In a brief statement issued on 24 March, Senator Cormann confirmed he would take time to consult further with stakeholders on the FoFA regulations:<\/p>\n

\u201cNow that the legislation has been referred to the Senate Economics Committee and to enable the Government to consult in good faith with all relevant stakeholders on the Future of Financial Advice regulations, I have decided to pause implementation of these regulations during that consultation.\u201d<\/p>\n

Senator Cormann added that the Government remained committed to implementing the improvements to the FoFA legislation as soon as possible. \u201cThese election commitments are reflected in the legislation currently before the House of Representatives, which will continue through the normal parliamentary process.”<\/p>\n

Senator Cormann was appointed Acting Assistant Treasurer on last week, after Senator Arthur Sinodinos elected to stand aside from his front-bench duties while involved in a NSW corruption inquiry (see: Sinodinos Stands Aside<\/a>).<\/p>\n

I am very happy to confirm that the government will continue to implement the policy commitments that we took to the last election<\/h6>\n

During Question Time in the Senate on the following day, Senator Mark Bishop<\/strong> asked Senator Cormann whether the Government would withdraw its FoFA changes, given that the Assistant Treasurer had stood aside.<\/p>\n

Senator Cormann responded by first defending Senator Sinodinos: \u201cSenator Sinodinos is a fine man of the highest integrity, who has been doing an outstanding job as the Assistant Treasurer. We all look forward to his return to the Assistant Treasurer position in due course.\u201d<\/p>\n

He then addressed the question as to whether the amendments would be withdrawn: \u201cIn the meantime, I am very happy to confirm that the government will continue to implement the policy commitments that we took to the last election. We know that is a novel concept for people on the Labor side, who go to an election and promise one thing but do the exact other thing after the election.\u201d<\/p>\n

Subsequently, during an interview with Sky News on Saturday 22 March, the Senator indicated that he would take some time to try to address some of the mis-truths about the amendments:<\/p>\n

\u201cThere is a lot of mis-information out there, which is clearly creating concern among people like the National Seniors Association and COTA. What I will be doing in the next few days and weeks is I\u2019ll make sure that everybody is very clear on what we\u2019re actually proposing to do, rather than what Labor is dishonestly and inaccurately suggesting that we\u2019re doing\u2026<\/p>\n

I\u2019ll make sure that everybody is very clear on what we\u2019re actually proposing to do<\/h6>\n

\u201cThe Labor Party is deliberately fudging things here. They are deliberately frightening people for political purposes. It is reckless and irresponsible. We will be setting out to ensure that people understand very clearly what we\u2019re actually doing, as opposed to what Labor is telling people we\u2019re doing.\u201d<\/p>\n

It is not clear whether the decision to pause the regulations process was made in direct response to the widely-reported criticism of the amendments, however, the Senator\u2019s statement regarding the regulations did refer to an opinion piece featured in the Australian Financial Review in which Senator Cormann confirmed the Government was committed to the retention of the best interests duty and the ban on conflicted remuneration.<\/p>\n

Responding to the Senator\u2019s decision to pause the regulations, the Financial Planning Association (FPA) said the move was welcome.<\/p>\n

\u201cFPA applauds Finance Minister Matthias Cormann for taking further time to properly investigate changes that would otherwise have been introduced as regulatory reform this week,\u201d FPA CEO, Mark Rantall<\/strong>, said.<\/p>\n

\u201cFPA fundamentally supports the original intent of the FoFA reforms based on sensible policy alignment, removal of unnecessary red tape and maintenance of consumer protection.<\/p>\n

\u201cWe welcome the decision by Minister Cormann and look forward to continuing our constructive discussions to find practical solutions to these amendments.\u201d<\/p>\n

Mr Rantall also acknowledged the constructive working relationship the Association has with Minister Cormann: \u201cWe look forward to further productive dialogue with Government to get the balance right.\u201d<\/p>\n

Financial Services Council CEO, John Brogden<\/strong>, labelled the decision \u201cprudent and sensible\u201d.<\/p>\n

The pause is timely and will allow the government and stakeholders to regroup<\/h6>\n

\u201cThere has been a lot of white noise and misinformation on what the proposed FoFA refinements mean for consumers,\u201d Mr Brogden said.<\/p>\n

\u201cThe pause is timely and will allow the government and stakeholders to regroup and make submissions to the Senate Committee on amendments which will allow FoFA to do what it was always intended to do. That is, to improve the quality and quantity of financial advice and to make it accessible for all Australians.\u201d<\/p>\n

Industry Super Australia also welcomed the announcement, saying the intervention of Senator Cormann was a timely circuit breaker and a victory for common sense.<\/p>\n

\u201cGaining industry consensus on the regulation of financial advice will ultimately boost consumer confidence both in the financial advice sector and the superannuation sector,\u201d ISA CEO, David Whitely<\/strong>, said.<\/p>\n

\u201cIndustry super funds will engage constructively with the Government and industry to contribute to charting a new way forward.\u201d<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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