The opt-in and fee disclosure exemptions for industry funds agreed to by the previous government may become history if the government’s FOFA amendments are blocked in the Senate.
Finance minister Mathias Cormann yesterday announced that if the government’s negotiations with the micro-party and Palmer United Party senators are not successful, then he may consider broadening the bans implicit in the FOFA reforms to the industry super fund sector.
Senator Cormann said the carve-out for industry funds on opt-in and retrospective fee disclosure requirements – secured in what Senator Cormann described as a “special deal” struck with former financial services minister Bill Shorten – may be terminated in the “interest of competitive neutrality”.
“This is not a threat but a likely consequence of any decision by the Senate to reject our decision to cut unnecessary and costly red tape which pushes up the cost of advice for investors without proportionate improvements in consumer protections,” Senator Cormann said.
“Our preferred course of action is if opt-In and retrospective fee disclosure are scrapped altogether, but if the Senate decides that they should stay, then I think they should stay for everyone providing and charging for advice on the same basis.”
Senator Cormann added, however, that he was looking forward to the negotiations and to the interest taken in the issue by the new Senate members.
Several firms have been impacted by the corporate regulator’s action.
Super funds must now have a retirement income strategy in place.
Vanguard has called for a complete overhaul of the advice industry.
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