Senator the Hon. Mathias Cormann
Minister for Finance
Date: Wednesday, 1 October 2014
The Senate's vote – again – in support of the Government's improvements to our financial advice laws is good news for consumers and for small business financial advisers.
The Senate tonight voted for the second time in three months in favour of more affordable, high quality financial advice by removing unnecessary and costly red tape, while maintaining all the important consumer protections that matter for consumers.
Consistent with our commitments before the last election, the statutory requirement for financial advisers to act in the best interest of their clients remains in place, as does the ban on conflicted remuneration.
However, as we promised we would do before the last election, we have:
- removed the requirement for an investor to keep re-signing contracts with their advisers on a regular basis (Opt-In);
- simplified and streamlined the additional annual fee disclosure requirements;
- improved the operation of the Best Interest Duty; and
- provided certainty around the provision and availability of scaled advice.
Consistent with our comprehensive statement of 20 June 2014, to provide clarity and certainty for the financial advice industry and investors seeking financial advice, the Government's changes to FOFA have been implemented through regulations which took effect on 1 July 2014, where that was legally possible.
The Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014 has now been subject to two Senate inquiries which have both recommended its passage.
The Government will continue to progress that legislation through the Parliament in an orderly fashion.
The Government appreciates the constructive approach taken by and the ongoing support of key cross-bench Senators in support of our financial advice law reforms.
In particular, we thank Mr Palmer as the Leader of the Palmer United Party and Palmer United Party Senators, the Australian Motoring Enthusiasts Party and Senators David Leyonhjelm and Bob Day for their support again tonight for our FOFA improvements.
The Government is implementing all of the additional improvements as agreed with the Palmer United Party and the Australian Motoring Enthusiasts Party through the further FOFA legislation.
The Government has also been working with all relevant stakeholders on the establishment of an enhanced Public Register of Financial Advisers where customers will be able to access information about advisers’ credentials and status in the industry.
Our goal as a Government remains to ensure we have a robust but efficient financial services regulatory system, which is competitively neutral so that people saving for their retirement or managing financial risks through life can access high quality advice they can trust and which is also affordable.
Karen Wu 0428 350 139