In the current political climate, the government is unlikely to push for the reinstatement of the FOFA amendments, the AFA’s chief operating officer has said.
Speaking at the AFA’s GenXt Roundtable, Phil Anderson said the organisation's expectations for FOFA reforms have “fundamentally changed” as power dynamics in the Senate now favour the Opposition.
“That has clearly been a huge challenge over the course of 2014, whether it's in the financial advice space or the broader political space,” he said.
He suggested the government would be unlikely to agitate for further FOFA changes, particularly given recent turmoil over Tony Abbott’s party leadership.
“From this point going forward, and certainly in the context of what happened earlier this week in Canberra, it would not be realistic for us to expect the government to put a lot more political capital on the line here,” he said.
“The political landscape in 2014 became particularly challenging and the optimism we had at the beginning of the year for fundamental change has significantly declined.”
Going forward, he predicted any regulatory developments in the financial services sector would need the support of both major parties.
In particular, he suggested the parliamentary joint committee’s report on education standards was likely to be implemented as it enjoyed support from both sides of politics.
“That might give us a message to the fact that this is what the government favours as a solution for resolving the concerns about education," he said.
In addition, he suggested the government may implement many of the recommendations contained in ASIC’s review of risk advice as well as the Financial System Inquiry report.
“At the moment, we're on the precipice because we're waiting to see what's going to flow out but there's no doubt the life insurance review will lead to significant change,” he said.
“There is also no doubt that the Financial System Inquiry will have fundamental changes.”
The prudential regulator has released its latest corporate plan.
The bid was originally put forward in June.
ASIC has issued a permanent ban to the former financial adviser.
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