Federal Member for Bradfield, Paul Fletcher announced in a speech to the Not for Profit Financial Planners Conference that the coalition did not support the FoFA rules being pushed on planners, and that if elected, they would implement a number of changes to the law.
The starting point for the FoFA reforms was the Ripoll Inquiry in to the collapse of Storm Financial, but Fletcher says there are a number of costly measures being included in FoFA that were not recommended by the inquiry. These include disclosure rules on annual fees for products that have been in place for many years, and the banning of commissions for insurance provided inside superannuation.
“These changes, we in the Coalition think, will have costs that exceed their benefits,” said Fletcher. “They make it harder for independent advisers to provide advice and charge the individual recipient of that advice. Given the complexity of superannuation and financial services generally, and the importance of the widest availability of good financial advice, we think this is regrettable.”
Fletcher announced some of the changes the Coalition would be implementing including:
The complete removal of opt-in arrangements
The simplification and streamlining of the additional annual fee disclosure requirements
Providing certainty around the provision and availability of scaled advice
Refining the ban on commissions on risk insurance inside superannuation
IFAAA member Fergus Hardingham doesn’t agree with Fletcher’s proposed changes, saying FoFA has been watered down too much already.
His firm has had compulsory opt-in annually for a number of years and he says it makes the industry look more professional.
“It’s good for advisers as a profession, good for clients, and good for us as a firm to sit down and have a more even playing field,” he said.
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