Are the financial planning industry’s FOFA criticisms being ignored?

Recent comments by Assistant Treasurer and Minister for Financial Services Bill Shorten have brought the Government's willingness to consult with the industry about FOFA into question, writes Mike Taylor.

The Assistant Treasurer and Minister for Financial Services, Bill Shorten, has made clear that the Government will consult with the financial services industry before it implements policy around the Future of Financial Advice Reforms (FOFA) and the Cooper Review.

However, the minister has also stated that the Government will not be allowing the consultative process to act as a roadblock to implementation.

In other words, the Government may listen to what everyone has to say, but this process may not ultimately result in any significant policy change and certainly won’t be allowed to create delays.

For a minister operating in a hung parliament and in circumstances where the industry holds a number of serious concerns about the Government’s policy agenda, Shorten’s statements are surprising and do not augur well for the development of a solid working relationship with all the stakeholders.

Notwithstanding the work already undertaken, significant differences of opinion continue to exist with respect to the FOFA reforms and the Cooper Review proposals and these need to be addressed if only to ensure that there are no unintended consequences.

What is more, the Government needs to ensure that the changes inherent in the FOFA reforms are applied equally across the industry and that industry superannuation funds, for example, are not allowed to operate in a different and more advantageous environment.

Equally, with respect to the Cooper Review recommendations, Shorten needs to accept that, Superstream aside, the industry is far from united in its support for the findings of the review panel — something made very clear by delegates at the recent Association of Superannuation Funds of Australia (ASFA) conference in Adelaide.

It has only been a few short months since Shorten assumed the financial services portfolio and it follows that he is only now beginning to come to terms with some of the underlying complexity and the factional divisions that exist.

That being the case, he should recognise the need to move cautiously and do more than just talk the talk on consultation.

Given Australia’s delicate political balance and the issues at stake, the financial services industry will not thank Shorten for moving too quickly and failing to take appropriate heed of possible unintended consequences.

If the new minister wishes to take all segments of the industry with him down the Government’s policy path, he must ensure they are willing participants in the journey.