Melissa Parke (Fremantle, Australian Labor Party, Shadow Assistant Minister for Health) Share this | Hansard source

Timing is everything, and it has been no surprise to see the coalition government throw the car into reverse when it comes to their plans to weaken investor protection on the eve of the Western Australian Senate re-run. The Labor government introduced the Future of Financial Advice reforms to ensure transparency and fairness, to ensure best practice and to ban conflicted remuneration. It was a step taken in response to clear evidence of established practices in the financial advice sector which were risky, harmful, improper and misleading. It included requirements that ordinary investors be provided with basic information about the fees attached to the advice they were receiving and a requirement that clients' consent be obtained rather than presumed in relation to ongoing fees. That is what sensible regulation in this space exists to do; it is what good government exists to do; and it is precisely what the wider community expects.

The government was clearly hoping that the weakening and watering-down of these long-needed protections could be done quietly, under the cover of the government's bizarre 'war on red tape'. The Senate re-run election in WA has spoiled those plans, and so now, out of the blue, we hear that the weakening and watering-down of financial protections is being delayed because suddenly it is all very complicated and technical. Let me tell you, there is nothing very complicated about it. Financial advisers are not, in essence, salespeople. Their expertise—for which each and every client is paying—goes to the quality of their financial advice, which in turn depends entirely on it being in the best interest of the client, with no interfering consideration such as a separate financial reward that an adviser might receive from the owner of a financial or investment product. Such a scenario presents the very definition of a conflict of interest. The financial self-interest of the adviser is in conflict with the financial interest of the person they are obliged to serve, and that cannot be tolerated as part of what should be a safe, fair and transparent financial services environment.

You can walk the streets in any community in this country and ask people whether they think financial advisers should be required to act in their client's best interest, and the only way you will find anyone who disagrees is if you happen to run into a dodgy financial adviser or else a member of this government's economic team. I assure you that in Western Australia there is a good understanding of what happens when the so-called red tape, the regulations that exist to protect all of us in areas of life like investment where we are vulnerable, is ineffective.

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