PJC fails to agree on FOFA
The fate of the Government's Future of Financial Advice (FOFA) legislation will be decided by debate in the House of Representatives after the Parliamentary Joint Committee (PJC) reviewing the FOFA bills failed to produce a bipartisan report.
The Coalition has made clear it wants financial advice opt-in removed and annual fee disclosure made prospective, with the best interests duty amended to specifically allow agreement between clients and their advisers.
The Opposition also wants no changes to existing remuneration structures except with respect to default fund risk insurance.
The Coalition members of the PJC have produced a dissenting report claiming the two FOFA bills are unnecessarily complex and in some parts unclear.
It says they will likely cause job losses in the financial services industry, will enshrine an unlevel playing field amongst financial advice providers and will cost about $700 million to implement.
The Coalition senators and members want the FOFA legislation deferred until it passes a Regulatory Impact Statement. As well, they want the legislation timed to coincide with the Government's MySuper changes.
Commenting on the PJC outcome, Opposition financial services spokesman Senator Mathias Cormann said the Coalition supported sensible reforms which increased trust and confidence in Australia's financial services industry by increasing transparency, choice and competition.
He said the government had failed to achieve the right balance with FOFA because it had failed to comply with its own internal process requirements around best practice.
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