Divided industry in wake of FOFA bills
While the Financial Planning Association (FPA) welcomed what it described as "FOFA concessions delivering sensible reform", the remainder of the financial planning industry expressed its disappointment at the ultimate passage of the Government's Future of Financial Advice (FOFA) bills.
The Association of Financial Advisers (AFA) referenced "tricky politics" as having secured passage of the bills, with AFA chief executive Richard Klipin saying the patchwork of changes that had been tacked onto the bills at the last minute only created more uncertainty for consumers and financial advisers.
As well, he expressed grave concern that the last-minute amendments "may have been put in place as a result of side deals involving the Industry Super Network".
However, for his part, FPA chief executive Mark Rantall said the FOFA bills "signal a new chapter in the security and protection of the financial well-being of Australians and facilitate the FPA's mission to help financial planning evolve into a universally respected profession".
He said Parliament had considered a heavily amended FOFA bill which included amendments to remove or modify onerous aspects of the one tabled.
"Though the FPA remains opposed to opt-in and the additional fee disclosure for existing clients, the final shape of the FOFA legislation delivers a sensible outcome for Australia's professional financial planners and their clients," Rantall said.
The Industry Super Network (ISN) applauded the passing of the bills, with chief executive David Whiteley saying the ISN supported the final proposal which enshrined opt-in in law, but with the flexibility for financial planners and licensees to gain relief from ASIC if they sign up to an approved code of conduct.
He said the industry funds would continue to work constructively with the financial planning industry on its journey to becoming a profession.
However the chief executive of the Financial Services Council John Brogden said his organisation was concerned that the legislation leaves it to the Australian Securities and Investments Commission to administer opt-in - without any certainty as to what they require to provide an exemption and what the professional standards will be.
"Under a last-minute deal between the FPA and ISN, the Government has dropped the requirement for opt-in but will not give any certainty to consumers and advisers on the operation of the best interest duty and scalable advice," Brogden said.
The level of anger felt by the Federal Opposition at the passage of the bills was reflected by Shadow Minister for Financial Services, Mathias Cormann, who vowed to repeal the worst elements of the legislation, particularly opt-in.
"Last-minute deals negotiated behind closed doors with selected industry participants is not the way to develop good public policy or legislation," Cormann said.
"This is just another special deal by Bill Shorten without proper consideration of the public interest and it ignores the views of the vast majority of financial services professionals in the industry."
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