ISA calls for halt on FOFA reforms
Proposed regulatory reforms of the Future of Financial Advice (FOFA) legislation should be put on hold following the Senate Economics Committee report on the performance of the Australian Securities and Investments Commission (ASIC), Industry Super Australia (ISA) believes.
ISA chief executive, David Whiteley, said the Government should not persist with is proposed regulatory changes to FOFA, until a decision was made in relation to the Committee's recommendation that a Royal Commission should be established to investigate the Commonwealth Bank Financial Planning scandal.
Whiteley claimed the Government's planned reforms would water down consumer protections enshrined in the current FOFA laws.
"The Government must assure all Australians they will not proceed with the wind-back of consumer protections in financial planning — changes that were lobbied for by the banks, including the Commonwealth Bank," he said.
"The exemptions proposed in the Government's wind-back of consumer protection laws were particularly beneficial to banks. They were designed to retain a ‘sales' culture by permitting payment of bonuses and incentives based on sales to financial advisers and other bank staff, as well as diluting the best interests test and allowing ongoing advice fees where no ongoing advice needs to be provided."
Whiteley said the report highlighted the importance of an adequately resourced regulator.
"ISA calls on the Government to urgently reconsider its proposed Budget cuts to ASIC," he said.
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