The Association of Financial Advisers (AFA) has thanked the Palmer United Party (PUP) "for its proactive action" in voting down a move to disallow the Government's Future of Financial Advice (FOFA) reforms.
AFA chief executive, Brad Fox, hit out that the "vigorous campaign of misinformation" instigated by opponents of the FOFA reforms, led by consumer advocate group Choice.
As reported by Money Management, Labor's Senator Sam Dastyari sought to disallow the Government's FOFA reforms, claiming they would "rode basic consumer protections", however, the motion was blocked with the support of the PUP.
""The prospect of having the FoFA Amendments regulations disallowed in the Senate…was deeply disturbing to our members," Fox said.
"The work of the Government and the Senators in resolving this matter is very important to the financial advice profession and we would like to particularly recognize the Palmer United Party for its proactive action and cross bench Senators Day, Leyonhjelm and Muir who voted for these sensible reforms to FoFA.
"These amendments do not reduce consumer protections, but importantly enhance the efficiency of the financial advice system."
While the PUP secured a number of promises that the Government would legislate to ensure that advisors act in the best interest of the client, and they will be required to provide clients with annual fee disclosure statements, Industry Super Australia said the reforms would leave consumers at risk of conflicted financial advice that is not in their best interest.
"While it is commendable that the Palmer United Party wishes to lift the bar on financial advice, the proposals for new regulations in three months are not adequate, and nor do they appear to address the fundamental problems with the existing regulations," the ISA said.
"While detail of the deal is limited, on face value the proposed changes don't involve any significant additional strengthening of existing laws and don't address conflicted payments that distort advice.
"Of particular concern is the heavy reliance on disclosure despite clear evidence from the regulator ASIC that it isn't an effective tool to improve the quality of advice."
