Labor pans FOFA amendments

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.