FOFA requires financial services unity
If the comments section on the Money Management website is to be taken as a guide, then the Financial Planning Association (FPA) continues to weather strong criticism over the manner in which it secured changes to the Government's Future of Financial Advice (FOFA) bills.
It is therefore little wonder that FPA chairman Matthew Rowe and chief executive Mark Rantall were last week selling the message that the industry ought to put aside the machinations which led to the FOFA changes, enabling it to unite to take advantage of what was achieved.
Looked at objectively, the attitude adopted by Rowe and Rantall seems reasonable enough.
The FOFA bills which emerged from the House of Representatives just over a fortnight ago are nowhere near as objectionable as they might have been.
The delivery of class order relief with respect to opt-in represented a particular achievement.
However it says something about the events which surrounded the final hours of negotiations around FOFA that the FPA insists it remains firmly opposed to opt-in, and that it will welcome its removal from the Act in the event that the Coalition gains government at the next Federal Election.
It is also in the nature of such things, that the FPA might have endured less criticism if it had negotiated the legislative changes a month earlier and without the apparent involvement of the Industry Super Network (ISN).
If the FPA had negotiated the changes directly with the Minister for Financial Services, Bill Shorten, it is arguable it would have faced significantly less criticism.
But Rowe and Rantall are right.
While many people will continue to harbour some animosity over the manner in which the FOFA changes were achieved, the interests of the broader financial services industry will not be served by continuing public argument and division.
The best interests of the industry will be served by uniting to ensure the legislation delivers the best possible outcome.
Further, if the Industry Super Network hopes to hold itself out as an honest broker, then its involvement in shaping the final content of the FOFA bills ought to preclude it from undertaking any further funding of advertising which in any way diminishes the role of financial planners or the value of advice.
Having apparently played a role in brokering an accommodation around opt-in and other elements of the FOFA bills, the ISN has effectively locked itself into the outcome.
It can hardly justify expending members' funds disparaging an environment it has helped create.
In weighing up the true impact of the accommodations and deals struck around the FOFA bills last month, financial planners should recognise that political reality suggests the immediate post-FOFA environment will likely last little more than six months past the next Federal Election.
Recommended for you
In this episode of Relative Return Insider, host Keith Ford and AMP chief economist Shane Oliver take a look at the unfolding impacts and potential economic ramifications of the US government shutdown and the surge in gold and bitcoin prices.
In the latest episode of Relative Return Insider, host Keith Ford and AMP chief economist, Dr Shane Oliver, discuss this week’s RBA interest rate decision, a potential government shutdown in the US, and a new property scheme aimed at first home buyers.
In the latest episode of Relative Return Insider, host Keith Ford and AMP chief economist Shane Oliver discuss the latest Australian CPI data and their impact on future interest rate decisions. If the RBA opts to cut rates again, how will this affect investor and consumer behaviour?
In our new ‘Ahead of the Curve’ series, in partnership with fund manager MFS Investment Management, Money Management will explore all things fixed income.
