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ISA calls on govt to 'scrap caveats and loopholes'

Industry Super Australia has called on the government to shelve the FOFA amendments, laying blame on “the banks” for the decision to change Labor’s legislation.

In a statement issued today, ISA said the current FOFA legislation contains an “ironclad best interests test; an iron-clad ban on kickbacks paid to financial planners; and an ironclad requirement that financial planners are only paid ongoing fees if they provide ongoing advice” and lamented the decision to amend the legislation.

“The banks have lobbied for a wind back of the best interests test, the re-introduction of certain kickbacks paid to financial planners and removal of the "opt-in" that stops commission-like asset based fees eroding consumers' investments, including superannuation,” the statement said.

“The banks are also lobbying strenuously for these changes to be implemented immediately by the making of regulations before 1 July.”

Shelving the plans would be a “prudent” response, the lobby group said.