Fewer Australians will be able to afford to obtain financial advice following the Senate's decision to disallow the Government Future of Financial Advice regulations, the Financial Services Council believes.
FSC chief executive, John Brogden, warned that the Australian Labor Party's successful disallowance motion would "do more harm than good", and prove costly for consumers and advisers alike.
"The market impacts of disallowance have not been considered by the Senate," he said.
"This disallowance motion will create a legal quagmire that will lead to disruption and unnecessary costs and will reduce affordability and accessibility of financial advice."
The Association of Financial Advisers (AFA) was also critical of the opposition's move to block the Government's FOFA reforms.
"Those who will suffer most from this disallowance are the small-business financial advice practices and their clients," the AFA said.
"Ironically, this is where the majority of personal financial advice is provided in Australia. It is disappointing to see small business caught in the crossfire again."
While the majority of industry bodies came out in opposition to the move to block the regulatory reforms, Industry Super Australia (ISA) "applauded" the Senate's support of the disallowance motion.
ISA chief executive, David Whiteley, said the Senate's decision was "an opportunity to repair and rebuild the professional standing of financial planners", saying it would provide strong consumer protections for Australians seeking advice.
"Australians want and deserve financial advice that is unequivocally in their best interests and free from sales incentives," he said.
"The Australian Senate has now rejected financial advice regulations that removed key consumer protections in financial advice laws and undermined confidence in the financial advice industry."
