Shadow Assistant Treasurer and Opposition spokesman on Financial Services Senator Mathias Cormann has repeated his party's opposition to the "bad" aspects of Future of Financial Advice (FOFA) reforms, while paying credit to the role the Association of Financial Advisers (AFA) played in FOFA negotiations.
Speaking at an AFA event on Friday, Cormann thanked the leadership team of the AFA "for standing strong on good public policy in the financial services space".
"I can understand that when pressure comes on from government it can actually be quite difficult to continue to make judgements about what is ultimately in the long-term interests of the public, consumers and business, but the AFA has done that," Cormann said.
Cormann said while not everything is wrong with FOFA, "the bad bits are really bad" and fail to strike a balance between consumer protection and ensuring that access to high quality advice remains affordable.
"The bad bits unnecessarily increase complexity, unnecessarily increase red tape, unnecessarily increase costs for little to no additional consumer protection benefits," he said.
"The bad and contentious bits of FOFA are there because the Government is preferring an ideological vested interests agenda – not because they're pursuing a genuine attempt at improving consumer protection mechanisms," he said.
"You all know what I'm talking about – this Government is particularly close to one segment in the financial services market and they're pursuing their agenda in order to give them a leg-up in what is a competitive marketplace."
The Coalition remains committed to the 16 recommendations it made to the parliamentary joint committee enquiry into FOFA, he said.
"That includes a commitment to remove opt-in. No ifs, no buts, we will remove opt-in because we think it adds unnecessary complexity, unnecessary red tape and unnecessarily increases costs for both consumers and for small business financial advisers," he said.
"We will seek to streamline the additional annual fee disclosure requirements which continue to get messier and messier. We will improve the definition of the best interests duty, we will ensure there is clarity around the provision of scaled advice, we will further refine the ban of the commissions on risk insurance in superannuation," he said.
"It is one area where collectively the AFA, the FSC (Financial Services Council) and [other bodies such as] the CSSA (Corporate Super Specialists' Alliance), we have been able to get Bill Shorten and the Government to back down quite significantly already, but there is still further to go."
