In a statement issued following the fateful vote in the Senate last night, Senator Cormann – who has been instrumental in establishing the Coalition’s FOFA policy in opposition and government – said the Senate’s decision was not in the “public interest”.
“By disallowing our FOFA improvements, the Senate tonight voted to increase the cost of financial advice and to lessen competition across the financial advice industry without improving consumer protections for Australians saving for their retirement,” Senator Cormann said.
The statement explained that the government will continue to seek passage of its amendments through the parliament, but that – should Labor’s original legislation be reinstated – an “appropriate transition” period will be put in place, naming the date of 1 July 2015.
“While tonight’s vote is disappointing, the government remains committed to these reforms,” it said.
“We will continue to work to ensure we have a robust but also an efficient financial services regulatory system.”
Senator Cormann also said it was unfortunate that the financial advice industry has been caught up in internal party politics and scandal.
“This is a very sad development,” he said.
“The only reason we are having this debate…is that there is now manifestly a split within the Palmer United Party and a split between the Palmer United Party and Motoring Enthusiasts Party. That is why we are here for the third time.”
The minister described Labor’s parliamentary tactics yesterday as an “ambush” and criticised Senators Lambie and Muir for not keeping their word.
“I in good faith entered into a deal with Senator Muir and Senator Lambie – and acted on the points of that agreement – but when it came time for them to honour their side of the deal they walked away,” Senator Cormann said.
All the comments assume that financial planning has a future. The elephant in the room is that the over regulation of this industry may end up destroying it, jobs will be lost and consumers will end up with no choice. Advice businesses must be commercially viable and there is no discussion at all on the impact of FOFA on business viability.
[quote name=”Ben”]There is a solution to all of this. Why don’t we cop it on the chin and embrace the changes. Next, lobby the Government for a level playing field. All super funds with in-house financial advisers, required to opt-in. No exceptions, unless the super fund completely divorces themselves from financial advice. ie. members must be told to seek advice independently. This would be in the best interests of consumers, and a fair outcome for independent financial planners.[/quote]
…totally agree with Ben. It’s the smartest way forward from here.
[quote name=”Philip Carman”]
No one (seriously) thinks all advisers are bad. It’s true that everyone has an agenda, BUT we should not get hysterical about FOFA; it’s better than public opprobrium.[/quote]
Philip, nothing in the amendments (rules) reduced protection. They provided certainty, allowed changes to licensees and hoped to provide a somewhat workable version of the current regulatory shamble.
I don’t disagree about your reference to the bad apples, every vocTion is cursed by this. However these same bad DONT FOLLOW THE RULES ANYWAY, more rules just hurt the honest majority.
Stupidity reigns in Canberra. One bogan, one rev head and a major party that declared war on many industries on business and jobs.
There is a solution to all of this. Why don’t we cop it on the chin and embrace the changes. Next, lobby the Government for a level playing field. All super funds with in-house financial advisers, required to opt-in. No exceptions, unless the super fund completely divorces themselves from financial advice. ie. members must be told to seek advice independently. This would be in the best interests of consumers, and a fair outcome for independent financial planners.
I guarantee that our clients would much prefer we spend more time looking after their affairs. That’s what they pay us for. They do not pay us to implement an agenda for certain political influences.
Why would Lambie listen to CHOiCE. That would be the last organization I would be taking advice from. Commission guzzling BIG Switch recipients. Where’s the opt-in letter for your magazine subscription by the way….doesn’t it just keep coming out of clients bank account until they cancel it?
Angry and frustrated! As an independent, self licensed adviser of many years, I feel like I’m being held down and physically abused by absolute incompetency and power obsession. Nonetheless, what doesn’t kill you……? Look, let’s continue to stride forward professionally notwithstanding current political ineptitude – at client meetings, raise and discuss the issue in a wise and considered fashion and encourage them to join us in lobbying our Federal members appropriately and to perhaps seek changes in the system that can allow mavericks to not only play havoc with our profession but stifle a Fed Govt. trying to clean up a fiscal mess.
The politicians in question have listened to the rhetoric that this will protect consumers. Whilst they may have their own interests at heart, they wouldn’t have had the chance to claim this as being “for the people” if this was not being promoted by other parties. We need to focus on educating everyone on what we do and why we do it, get rid of the bad apples (if you know one, report them), and be positive and support everyone doing the right thing. Start posting positive case studies, start making a difference, and tell everyone about the good things you do. We can’t fight on their terms, so we won’t.
A disgrace.
We must all be members of the FPA or AFA, time for these organisations to step up and represent advisers.
Whilst we have been encouraged to contact politicians the FPA and AFA need to step up now !
I couldnt agree more with Retiring’s comments. The Labour party wrecklessly closed down the live cattle export market with NO warning and the grazziers lost a fortune. Their action was over zealous to say the least and was not proportionate with the problems in the industry or more importantly on the small number of rogue providers. The graziers are now taking the government to court. I want to know why and how they (ill informed people) can wipe out my wealth in a business i have slaved in when i am not a rogue adviser. i have no product bias and they are now telling me that my business cant be sold or i cant change licensees.
No matter what regulation, rules, etc are in place, how ever lax or tight, in any profession, at any time, there will always be around 99% of people doing the right thing by clients and bettering themselves due to their own values and motivations, and just 1% doing the wrong thing via incompetence or malice. Any overhaul of our profession or any other should be more focused on activities to catch and weed out the poor 1%, not just blanketing the 100% with stupid ideas.
A lot of business decisions have been made in the last 5 months based on Lambie and Muir’s promises in July (both public and private company’s)
I wonder if that leaves them open to a class action from advisers who have now lost money due to their duplicity !
The poor understanding of our political system shown by many comments here staggers me.
Mr Cormann is no friend to your industry…He is looking after the Big End of town exclusively.
I once thought that the comments on these pages lacked understanding of how the public perceives our industry, but as they don’t appear in mainstream media maybe the writers DO know and simply confine their rhetoric to this narrow forum.
I am called upon to provide expert witness where members of the public have been victims of often self-serving advice and I can attest that there are some advisers out there who we all need protection from – both as consumers and practitioners. They damage YOU and your community and THEY are the reason the industry needs cleaning up.
No one (seriously) thinks all advisers are bad. It’s true that everyone has an agenda, BUT we should not get hysterical about FOFA; it’s better than public opprobrium.
IMO the so-called Coalition of Common Sense had not even read the FoFA Amendments. Those who actually work in the industry understand that the changes proposed made the Legislation more workable. There was no sense of less protection to the consumer. What the Senators should now admit is whether they have read and understood the Amendments.
What a complete shambles by a bunch of people who know little of our industry.
Their lack of knowledge is obvious as all this has done is increased the cost of getting financial advice by increasing adviser costs. This will result in those who can’t pay for advice, not getting it. As we know, generally the ones who need it most.
From the independent advisers perspective, the value of their businesses just collapsed. Industry funds would have cracked open the champagne last night.
Having spent the past week traveling across 4 states in australia and being part of some very motivational banquets and celebrations hosted for some of the worlds most influential leaders, I scratch my head and wonder we we as a country have gone so wrong with the leadership we are being delivered.
one only needs to look closely at the Prime Minister of India Mr Modi who holds rock star status and the reasons are he is actually making changes and improvements to all the countries people and their lives.
He also tells people he is not their Prime Minister but their servant how powerful is that. Sadly we are sadled with individuals that appear to be placing their own interests before the ones that have voted them to also be our servants.
This behaviour being displayed now is causing massive instability within the whole Australian financial service market and both clients and providers.
[quote name=”Amy”]I could not believe Australian voted for Lambie who has no idea what she is doing, narrow minded. This decision is killing financial industry.[/quote]
Australia did not vote for her – 6.9% of Tasmanians did. Unfortunately under our system, this was enough for her to get a Senate seat. Every voter needs to seriously think about what they are doing in future.
who would have thought a politican could/would change their mind vote in their own self interest.
Well this outcome is typical of what we have come to expect from our Political leaders, we hear lots of rhetoric but a total lack of action. Its shameful that an individuals such as Senator Lambie and Muir, who have clearly shown no integrity, nor strength of character in standing by the deal they made, because they are too busy feathering their own self interests, have now left the advice industry in a state of limbo. You are both a disgrace.
I could not believe Australian voted for Lambie who has no idea what she is doing, narrow minded. This decision is killing financial industry.
I find it morally disgusting that an in-bred redneck senator can hold the balance of power and defy the will of the people and the mandate from a elected government
Makes you wonder what Labour offered those ministers to turn their back on what they originally agreed. I really hope self interest didn’t play a role., but the sceptic in me says of course it did!!!
Please can we have a bi-election in Lambie’s seet?
So what do we tell our hard working staff today
Heads we lose tails we can never win
If the honest self employed advisers collapse you will just be left with property spruikers setting up geared self managed funds
The only winner was IS dedicated to eliminating advisers
IMO Not over yet,
Just means our industry and Government will be held to ransom by the Renegade minority until Mathias can find a way to buy them off in the next 12 months.
This is now turning into a bad joke, but there is nothing to laugh at. I cant help but wonder if things had of been different if CBA /Financial Wisdom had shown some integrity and dealt quickly and fairly with financial victims.
Not that the government had much choice but the old saying goes “you lay down with dogs, you get up with fleas”.