The agreement was announced by Finance Minister Mathias Cormann in the Senate this afternoon, with support from the three Palmer United Party senators and Ricky Muir ensuring that a Labor and Greens push against the Future of Financial Advice legislation failed.
The laws, initially introduced by previous Labor government, were designed to protect consumers from financial planning fraud. The regulations were relaxed through ministerial regulation recently by the Coalition.
Addressing the Senate this afternoon, Senator Cormann said the government would gain support from the four crossbench senators.
He added he had also had “very good discussions” with Family First Senator Bob Day and Liberal Democratic Senator David Leyonhjelm.
Financial advisers will be obliged to disclose fees and put clients ahead of their own interests under rule changes that secured the Palmer United Party votes.
Senator Cormann said the changes would be made within 90 days and further reforms would be outlined in legislation.
Under the changes:
- an adviser will be required to act in the best interest of the client and put the client's interest ahead of their own
- an adviser must provide a statement, signed by them and their client, that they believe the advice is in the client's best interests
- fees must be disclosed
- a client has a right to return financial products under a 14-day cooling off period
- a client has the right to change instructions to their adviser if the client's circumstances change.
The announcement followed a push by Labor and the Greens to disallow the regulations, led by Labor Senator Sam Dastyari.
Senator Dastyari criticised the Palmer United Party for “abusing” their power in the Senate, stating that the country was now led by a “Liberal National PUP Coalition”.
“A deal done with a minor party at the eleventh hour,” he said.
“This is a government that no longer controls its agenda.”
He added that the Australians now had “the PUP wagging the tail wagging the dog”.
Palmer United Party leader Clive Palmer addressed the media on the negotiations later, saying the changes would be positive.
- with AAP.
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