FOFA disallowance reduces affordability of advice: FSC
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."
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
