Independents’ critical FOFA roles underscored

The Opposition spokesman on Financial Services, Senator Mathias Cormann, unquestionably hit a strong note with financial planners when he late last month told an Association of Financial Advisers (AFA) function that the Coalition would be blocking the Future of Financial Advice (FOFA) proposals in their current form.

But Cormann also sent the very clear message that, like the tenure of the Gillard Government, the future of the FOFA changes resides in the hands of the independent members of parliament sitting in the House of Representatives – particularly Rob Oakeshott, Tony Windsor and Bob Katter.

In referencing the pivotal role of the independents, Cormann was effectively urging financial planners to act as their own primary lobbyists and to take their concerns about the FOFA proposals to their local MPs.

It is the same message which has been issued to planners by both the Financial Planning Association (FPA) and the AFA and it is one that they should heed.

Financial planners now need to accept that, notwithstanding some continuing discussions, the legislation the Government ultimately introduces to the Parliament will strongly reflect the FOFA changes announced by the Assistant Treasurer and Minister for Financial Services, Bill Shorten.

It follows that for planners to achieve change they will need to do so via the Parliamentary processes of having amendments moved and accepted by a majority of parliamentarians sitting in the lower house.

The likelihood of achieving the necessary amendments in the Senate will be remote in circumstances where the balance of power will be held by the Australian Greens, who have indicated support for much of the approach being pursued by Shorten.

By indicating the Federal Opposition will oppose the FOFA changes in their current form, Senator Cormann has made clear that the opposition will be moving appropriate amendments and will be seeking support for those amendments from the independents.

Importantly, for planners, the independents have already shown a willingness to both amend and block legislation where they have been convinced of the need to do so.

Where influencing the independents is concerned, financial planners based in and around Tamworth and Port Macquarie in NSW find themselves geographically close to Windsor and Oakeshott, while those in far north Queensland will have no trouble in recognising the attitude of Bob Katter.

Australian financial planners have never been noted for manning the political barricades, but if they are genuinely concerned about the impact of the FOFA changes they will make their feelings known, not only to the independents but all their local MPs.