In a statement issued shortly after Assistant Treasurer Arthur Sinodinos’s announcement on Friday morning, shadow treasurer Chris Bowen and shadow minister for financial services Bernie Ripoll – both of whom played instrumental roles in the policy thinking behind FOFA reforms – lamented the proposed changes.
“The proposed changes announced by the Coalition government today are bad news for investors and people saving for their retirement,” said the joint shadow ministerial statement.
“As consumers are off shopping for their families for Christmas, the government is focused on unwinding reforms designed to restore faith in and professionalise the financial advice sector and ensure that Australians are getting financial advice that is in their best interests.”
In a Tweet sent out on Friday, Mr Bowen went a step further, arguing the amended legislation as proposed by the government will make “another Storm, Westpoint or Trio collapse more likely”.
Maurice Blackburn, a law firm specialising in class-action litigation with close links to the labour movement, also issued a statement criticising the changes.
“The Government’s plan to remove ‘catch-all’ from the best interests duty could water down this essential consumer protection, while the recommended introduction of scaled advice could limit the scope of advice given to clients,” said Maurice Blackburn principal John Berrill.
“While we recognise that some of the reforms will help to clarify the rights and obligations under the laws for both industry and consumers, there are some changes we believe could seriously weaken consumer protection,” he said.
However, despite these pockets of cynicism, many industry stakeholders and commentators have welcomed the announcement as an early Christmas present.
As well as the industry associations such as the AFA, AIOFP and FPA, industry giants AMP and BT Financial Group also issued statements pledging support.
“Helping Australians achieve their life goals is something we are passionate about and these reforms will ultimately help enable more Australians to do just that,” said AMP group executive, advice and banking, Rob Caprioli.
“It means the original intent of FOFA, to provide easily accessible and affordable advice to Australians, can now by fully realised and this ultimately means a better outcome for those Australians seeking financial advice.”
BT chief executive Brad Cooper said the proposed changes “strike the right balance” for Australian investors.
Senator Sinodinos will be expanding on the FOFA changes as well as the Murray Inquiry at an upcoming business lunch in Sydney, sponsored by ifa. To reserve your table or seat click here.
Bowen, Ripoll and anybody else hell bent on decimating our industry, suck it up. The Coalition now have to pick up the pieces and repair a very broad range of misjudgements and miscalculations created by the past government and its advisers.
Now that you have lost your positions because of your failings, leave us in peace and let us continue doing what we have always been best at doing and that is making a positive difference to people’s lives.
The reversal of these reforms is bad news for the professionalism of financial planners.
Shorten, Bowen and Ripoll will be recorded in history as being as politically destructive and inept as their counterparts decades ago lead by Whitlam and his four “C’s” – Cameron ,Crean, Connor and Cairns – who nearly sent Australia into bankruptcy. Are Australians of today suppossed to trust these individuals and the Union aligned legal firms ??
Like his predecessor, Electric Bill, Mr Bowen has mentioned a product failure (Westpoint) as reasons to retain the existing and fundamentally flawed FOFA laws.
The problems leading to Westpoint-type financial product failures sit with product owners, ASIC, ATO and the other regulators who were supposed to be overseeing the proper running of them.
Understand this, Chris and Bill, advisers are NOT responsible for product failures any more than car salesman are responsible for defective cars.
But it seems for politically-motivated reasons easier to blame the adviser at the coal-face than look at the regulatory system supposedly protecting consumers from these collapses.
These are not PROPOSED changes
They are going to happen first by regulation and then by legislation with the Senate post 1/7/14
Next for some competition in the Award Super Arena breaking up the 20 year old Union Monopoly
This will provide real scaled financial advice from experienced advisers to Industry Fund Members who have been so poorly served and treated as ‘tickets’ with utter contempt for their individual circumstances
This makes Bowen’s statement a few Anzac Day’s ago look pretty shabby as we look back on a period in Financial Services best forgotten !
The ALP introduced a system (FOFA)that sounded good but in reality was flawed.
It seems the real intention of FOFA was to steer more people towards ISN/ISA funds where the advice they would receive would be limited and biased.
As normal it is up to the LNP to come up with a solution to a problem created by the ALP. Trouble is that as with many of the problems the LNP are trying to fix, the ALP/Greens won’t accept they lost the election and therefore should get out of the road.
The ALP is not about protecting Consumers, it’s about protecting it’s Union mates on the Boards of the ISA/ISN Funds. These of course than return the favour by giving substantial financial support to the ALP.
If you doubt this have a look at Australian Super. Out of 21 Directors/Alternates/Committee Members, 14 are closely connected to the ALP and/or Unions. 67% Union affliated – how does this correspond to the 15% of Australian workers who are Union members?
Labor are struggling to realise they are no longer in power…and if they continue to hold the nation in contempt by trying to block every bit of legislation that helps improve productivity of this nation, then they deserve to be in opposition for a very long time.
wouldnt expect any less from these labor clowns. the best thing about this xmas is that they are no longer in power and with a bit of luck wont be seen again for the next 20 years