Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Bishop for that question. If I may say so, I do not accept the premise of the question. Senator Bishop is perpetuating an absolute falsehood. The government is not proposing to get rid of the best interest duty. The government is not proposing to remove the requirement for financial advisers to act in the best interests of their clients. In fact, that requirement is now and will continue to be in section 691B(1) of the relevant future of financial advice laws. In the second part of that particular section, there is a checklist of the things that an adviser has to comply with in order to satisfy that particular best interest duty. It involves making sure that you are across the subject matter, that you are identifying all of the relevant facts such as the objectives of the client, the financial situation of the client and the relevant circumstances. The adviser has to make a judgement on whether or not they are qualified to provide the advice, or they can refuse to provide the advice or decline to provide the advice if they are not qualified to do so—and so on. All of those requirements will remain.

What we have said is that the additional catch-all, open-ended requirement that Labor had added at the bottom of the list—that the adviser would be required to do anything else, take any other reasonable step in order to fulfil the best interest duty—was too open-ended; it provided too much uncertainty for consumers and for financial advisers about how this particular best interest duty would operate. Too much uncertainty means too much additional cost, which means that seniors across Australia would have to pay more for advice than they otherwise would have to, and we want seniors to have access to affordable, high-quality advice they can trust.