Annual renewals bill passes Parliament

Following its passage through the House of Representatives earlier this month, the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020 passed the Senate on Wednesday.

The bill was listed as non-controversial legislation but ifa understands that following advocacy from the advice sector, cross-bench senator Rex Patrick had proposed some last-minute amendments to the bill. However, Mr Patrick's amendments were eventually withdrawn and the bill passed the upper house without issue.

Commenting on the passage of the legislation, Minister for Superannuation, Financial Services and the Digital Economy Jane Hume said the changes were "an important step in restoring trust and confidence in Australia's financial system".

"The passage of [the] bill follows through on the government's commitment to implement the recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry," Ms Hume said.

"Under the legislation passed today, clients of financial advisers will receive an annual, forward-looking summary of fees and corresponding services, in addition to existing disclosures."

The legislation faced criticisms from many corners of the industry, with the AIOFP, PIFA and AFA all lobbying cross-bench senators for last-minute amendments to the bill.

The new laws are expected to cost the industry $28 million in terms of up-front an annual compliance expenses.

AIOFP executive director Peter Johnston said the passage of the bill should be viewed by advisers as the final nail in the coffin for the Liberal Party as a pro-business political movement.

"As they have done for the past eight years, the Liberal Party will not listen to the industry or consumers about their legislative pathway and agenda to remove advisers from the industry," Mr Johnston said.

"The advice community must now return the compliment by removing them from office. This is yet again another blatant disregard for consumers and the cost of advice justified by commissioner Hayne's misguided recommendations."