Disallow FOFA regulatory changes says ISA
Industry Super Australia (ISA) has used the gazetting of the Government's regulations implementing its Future of Financial Advice (FOFA) changes to warn that they will effectively "return the financial planning industry to the bad old days".
The regulatory changes have been gazetted to become effective from today (1 July), with ISA chief executive, David Whiteley promptly issuing a statement stating that, "On the heels of a Senate Committee inquiry report recommending a Royal Commission into financial advice scandals, the Federal Government is proposing to bring back sales incentives payable to financial planners by banks and product providers".
In doing so, Whiteley called on the Senate to disallow the regulatory changes.
He said the regulations gazetted by the Minister for Finance and Acting Assistant Treasurer, Senator Mathias Cormann, would "reduce the best interests test to a checklist and enable planners to give advice that is not in their client's interests".
Whiteley's statement also claimed the changes would also see the removal of the ‘opt in' requirement, "allowing commission-like ongoing fees to be brought back".
"The Government's wind back of financial advice laws will send the wrong signal to financial planners and banks and mystify Australians," he said "These changes were lobbied for by the banks and financial planners, including the Commonwealth Bank."
"The Australian Senate must disallow these regulations at its first opportunity in order to retain iron-clad consumer protections for Australians seeking financial advice," Whiteley said.
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