FPA rejects changed FOFA bills

The Financial Planning Association has accused the Federal Government of making further amendments to the draft Future of Financial Advice (FOFA) legislation without conducting further consultation with the industry.

Reacting to the introduction of the FOFA bills to the House of Representatives on Thursday, Financial Planning Association (FPA) chief executive Mark Rantall said the changes, particularly the imposition of retrospectivity around annual fee disclosure statements, meant the FPA could not support the legislation as it currently stands.

At the same time, Association of Financial Advisers (AFA) chief executive Richard Klipin has taken issue with the explanatory memorandum underpinning the bills, including heavily disputed research undertaken by Rice Warner.

He said the inclusion of the Rice Warner research "demonstrates that while aware of the impact of the legislation, the Minister has the audacity to pretend that it is a plan for growth for the financial advice industry".

"The FOFA bill is part of a cleverly contrived plan to concentrate control of Australians' superannuation money in the hands of the union-controlled industry super funds for the benefit of the Labor Party," Klipin said.

Rantall said the FPA was disappointed with how the legislation had been drafted and by the amendments made to FOFA Tranche 1 - something that meant the organisation could not support the bill as it currently stands.

"The FPA has held many open conversations with Government outlining where our members stand in relation to opt-in and FOFA in general, and how it will affect consumers," he said.

Rantall noted the bill had been supported by consumer group Choice and the Industry Super Network, but said he believed both organisations were driven by self-interest rather than consumer interest.

AFA president, Brad Fox claimed the legislation would serve to decimate small business advisers and favour the large institutions and industry funds.

"Small business advice practices in the suburbs and in regional areas will struggle to survive, which means the only advice available to consumers will be that provided by large institutions and industry funds," he said. "It is a retrograde step."