The Government cannot guarantee there will not be another major financial product collapse but it is ensuring that it has the best possible regulatory regime in place to avoid it happening, according to the Assistant Treasurer, Arthur Sinodinos.
Addressing the SMSF Professionals’ Association of Australia (SPAA) conference in Brisbane, Sinodinos suggested that there had been an unrealistic expectation that legislation such as Future of Financial Advice (FOFA) could prevent such collapses – and this was simply not the case.
The minister also used his discussion at SPAA to thank former High Court judge, Sir Anthony Mason, for clarifying the legal position of best interests in the context of the Government’s changes to FOFA.
In a seeming reference to recent industry super fund statements, Sinodinos said some urban myths seemed to have been set loose on best interests, and Sir Anthony had made an important point and placed the legal underpinnings of best interest in the correct context.
The minister said that client best interest was not only covered by common law, as stipulated by Sir Anthony, but also Corporations Law.
