The financial services industry has expressed its disappointment at the failure of the Parliamentary Joint Committee (PJC) reviewing the Future of Financial Advice (FOFA) bills to deliver a unanimous set of recommendations reflecting the industry’s concerns.
The chief executive of the Financial Services Council (FSC), John Brogden, said his organisation was disappointed at the committee’s unwillingness to accept industry concerns and make pragmatic changes to improve the legislation.
At the same time, Association of Financial Advisers (AFA) chief executive Richard Klipin said that with the Government and Coalition members of the PJC having failed to find agreement, his organisation would be calling on the independents in the House of Representatives to support key amendments.
"We urge the independents to review the evidence put forward by the industry which reinforced many of our key concerns – namely that FOFA, as it currently stands, doesn’t deliver, creates an unlevel playing field that advantages one sector of the industry over another, and will ultimately result in poorer outcomes for consumers," Klipin said.
Financial Planning Association (FPA) chief executive, Mark Rantall said the FPA was disappointed with the overall recommendations outlined in the PJC’s report on FOFA.
"Whilst the report acknowledged some of the concerns raised by the FPA, the majority of the suggestions the FPA made throughout the inquiry, and indeed recommendations made by other representatives of the financial planning industry, have not been adopted," he said.
For his part, Brogden said the industry would now increase its efforts to convince the Government of the need to make the legislation workable so that it delivered on the Government’s own objectives of increasing trust and confidence in financial advice, improving accessibility and reducing conflicts of interest.
"The FSC supports the overwhelming majority of the FOFA reforms," he said.
"We want higher standards for financial advisers, we want a best interest duty that puts consumers’ interests first and we want an end to commissions.
"But we need to be able to provide affordable advice, not just to the Australians who receive it now, but most importantly to the millions who do not," Brogden said.
"In its current form, the legislation puts this at risk."
