FOFA could be blocked, says Cormann
The Federal Opposition will be well placed to block the Government’s proposed Future of Financial Advice (FOFA) reforms from passing through the Parliament next year, according to the Shadow Minister for Financial Services, Senator Mathias Cormann (pictured).
Speaking at a function hosted by the Association of Financial Advisers in Sydney, Senator Cormann said the Coalition had 74 out of 150 members of parliament in the House of Representatives, creating a real chance for the Federal Opposition to block the proposal.
The Coalition would need to win over one other crossbencher – from Tony Windsor, Bob Oakeshott, Andrew Wilkie or Adam Bandt – for this plan to be effective, Cormann said, calling upon financial planners to contact their own members of parliament and do their fair share of lobbying.
“We've got the opportunity to put forward our ideas and hope that our arguments are going to be so strong and so compelling that we will be able to convince people on the crossbench to go along with our view of what is good and what is bad public policy,” Cormann said.
The Senator had reassured advisers that the Coalition would not support the FOFA package as it currently stood, calling it a “bad public policy” and accusing Minister for Financial Services Bill Shorten of “looking after the vested interest of his friends in the industry super fund movement”.
The Government had presented the FOFA reforms as a way to stop future collapses of companies such as Storm Financial, Westpoint Group or Trio Capital, but the most controversial reforms in the package had nothing to do with these types of collapses, according to Cormann.
He referred to the banning of risk commissions within superannuation and the introduction of the opt-in requirement, which he said were unnecessary.
“There is absolutely no need for the Government to get itself involved and mandate the requirement that people have to re-sign contracts with their adviser,” he said.
“Don't think the FOFA in its current form is an inevitability, there is still debate to be had in the parliament and there is opportunity for us to pull what is currently the wrong piece of legislation,” he said.
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
