The Federal Opposition believes some segments of the financial planning industry got "sold a dummy" on the manner in which approved industry codes of conduct would "obviate" the need for "opt-in".
The Opposition spokesman on Financial Services, Senator Mathias Cormann, said this was why the Coalition remained firmly committed to repealing the opt-in provisions of the Future of Financial Advice (FOFA) legislation in the event it gains office.
"Labor's last minute FOFA deal around opt-in was always a con," Cormann said.
"It was a political fix for Bill Shorten to get reluctant crossbench MPs on board with bad public policy – sadly, aided and abetted by a part of the financial planning industry," he said.
"The reality is that opt-in is bad public policy. It unnecessarily increases red tape and costs for both small business financial advisers and their clients," Cormann said.
"The Coalition will fix Labor's FOFA mess. No ifs and no but – if we are successful at the next election we will abolish opt-in in government."
Cormann's renewed commitment towards repealing the opt-in arrangement follows on from industry concerns that the eleventh hour deal around codes of conduct will not ultimately deliver planners any significant relief from the opt-in obligations.
This follows a statement by Australian Securities and Investments Commission (ASIC) commissioner Peter Kell that "we expect that codes will contain provisions that require members to have active obligations towards their clients that will achieve the same outcome as the opt-in requirement intends to achieve".
Money Management understands that in the wake of Kell's comments, a number of meetings between the regulator and industry representatives have confirmed the adoption of a prescriptive approach.
Cormann said he believed the Government had always intended that ASIC would pursue the type of approach outlined by Kell, but had voiced a different line to persuade the independents that a deal had been done with the industry.
Kell outlined the regulator's approach at a forum last month jointly hosted by the Financial Services Council (FSC) and the Association of Financial Advisers (AFA), with AFA chief executive Richard Klipin acknowledging that it had prompted his organisation to seek greater clarity on the issue.
He declined to discuss the content of meetings subsequently held with officials within ASIC, but said Kell's remarks had made it very clear that significant responsibility would attach to the codes.
"I think we understand from what was said that the codes will impose serious obligations on organisations and their members," Klipin said.
Other financial planning industry sources expressed concern that the obligations imposed by the codes might ultimately prove more onerous and costly than the opt-in regime specifically outlined in the legislation.
