AMP results highlight FOFA shortfalls: Cormann
Recently released AMP financial results highlight the fact that Future of Financial Advice (FOFA) reforms should have been subject to a regulatory impact assessment, according to Shadow Assistant Treasurer and Opposition spokesman on Financial Services Senator Mathias Cormann.
AMP estimated the one-off cost to the company of implementing FOFA, Stronger Super and other regulatory changes over the next 12 to 18 months to be between $60 million and $75 million after tax. It had also established a dedicated team of 50 people purely to deal with regulatory changes.
"No wonder Bill Shorten never took his FOFA changes through a proper regulatory impact assessment to assess the cost/benefit equation, arrogantly failing to comply with the rules set by his own government," Cormann said in a statement.
"Across the whole financial services industry conservative estimates are that FOFA will cost about $700 million to implement, with $375 million in additional compliance costs every year. These additional costs will ultimately make access to financial advice less affordable for consumers," he said.
"We remain concerned that FOFA unnecessarily increases red tape and costs for both business and consumers, while reducing choice, competition and diversity across the financial services industry. It remains unnecessarily complex and in large parts unclear," Cormann said.
He then reiterated that if elected the Coalition would repeal opt-in and "fix" other elements of the reforms around fee disclosure requirements, best interest duty, scaled advice and commissions on risk insurance inside superannuation.
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