Cormann outs FOFA amendment critics
Critics of the Government's proposed amendments to the Future of Financial Advice (FOFA) legislation, including Industry Super Australia (ISA) have not been able to state how they definitively undermine the client best interest process, according to the Minister for Financial Services and acting Assistant Treasurer, Senator Mathias Cormann.
Cormann has used a Senate Estimates hearing to detail the consultative process he had initiated around the FOFA amendments and suggested that critics of the Government's approach had not been able to suggest a better alternative.
"What I have asked all stakeholders, in particular stakeholders like National Seniors, Council of the Ageing and the like, and Industry Super Australia for that matter, was, ‘After the first six steps that I laid out as part of this [best interests] test, what other reasonable step do you think a financial adviser should take in order to prove that he or she has done everything necessary to prove that he or she has acted in the best interests of his or her client?'" he said.
Cormann told the Senate committee hearing that, to date, nobody had been able to tell him what other reasonable step there was.
"So what I then say is that once you have this open-ended catch-all provision which is not specific
you add risk and uncertainty, which means that you add costs and ultimately the consumer has to pay more for the advice than they otherwise would have to," he said.
Cormann also made clear during Senate Estimates that he would not be moving to further outline the Government's legislative and regulatory changes relating to FOFA until after the Senate Committee reviewing the FOFA legislation had issued its final report.
That report is expected next week.
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