Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

Firstly, I would like to thank those members who have contributed to this debate. The Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014 amends the Future of Financial Advice legislation, also known as FoFA, to reduce unnecessary regulatory burden, provide more certainty and make advice more affordable whilst maintaining FoFA's key consumer protections. The amendments implement the improvements to FoFA which we took to the last election. There has been a lot of scaremongering and misinformation about the government's improvements to FoFA. The amendments will restore the balance between appropriate levels of consumer protection and access to affordable high-quality financial advice. The bill will not weaken the consumer protections currently provided under FoFA. Rather, the amendments add certainty to industry and consumers alike and make financial advice more affordable for all Australians. Brad Cooper, CEO of BT Financial Group, notes the amendments are:

… striking the right balance between consumer protection and a practical way for our customers to get the information they want.

The concern raised by some is that the amendments will remove the best interests duty. This is not correct. Let me make it clear: the bill does not remove the best interests duty. The duty remains. Rather, as a result of the changes in the bill, consumers and financial advisers will now have certainty about the obligations that financial advisers have to act in the best interests of their clients. These changes have been welcomed by industry. John Brogden, CEO of the Financial Services Council, noted that the amendments:

… do not reduce in any way a financial adviser’s legal requirement to act in the best interest of their clients.

Another concern that has been expressed is that the amendments will allow the return of commission payments. Again, this is not the case. The ban on conflicted remuneration for benefits received in relation to personal advice will remain. There is a targeted general advice provision which explicitly indicates that payments commonly referred to as commissions are not permitted. Steven Munchenberg, CEO of the Australian Bankers' Association, notes:

It is a sensible balance and will ensure that banks can continue to provide free, simple and general advice.

In addition, clients will continue to receive information about the fees they are paying including the disclosure statements for clients who entered into arrangements post 1 July 2013. As Brad Fox, CEO of the Association of Financial Advisers, explains:

These sensible amendments … eliminate unnecessary red tape and costs and will help thousands more Australians receive the benefits of life-changing financial advice backed by the safety-net of strong regulation that enforces client best interests.

The bill delivers on the government's election commitment to reduce the regulatory burden on the financial services industry and contributes to the government's broader deregulatory agenda. Amendments will also be tabled to the bill to amend the statement of advice requirements to increase transparency in the services that clients receive, ensuring that they are aware of their rights and their advisors' obligations. These amendments implement the additional improvements agreed with the Palmer United Party and the Australian Motoring Enthusiasts Party. I commend the bill to the House.

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