Financial services reform defended

Plans to ease regulation of the financial services industry will uphold consumer rights and be considered by parliament, the federal government says.

The federal government will push ahead with plans to roll back regulation of the financial services industry and insists the move will not expose consumers or business.

Assistant Treasurer Arthur Sinodinos said legislation on the Future of Financial Advice amendments will reach parliament within weeks.

His comments allay fears the reform would come by way of regulation and therefore be open to legal challenge.

Current legislation - which includes a "best interests" clause and stops financial planners taking payments where there's a potential conflict of interest - came into effect in July in the wake of the Storm Financial collapse, which saw some investors lose life savings because of conflicted financial advice.

"Neither our reforms nor the existing FOFA laws can prevent a possible future financial collapse," Senator Sinodinos said.

It is the government's intention to reduce red tape and cut compliance costs, he added.

Opponents of the coalition reform fear it will blow out adviser fees, with Labor adding it will bring uncertainty to the sector.

"One of the reasons Australians have not been accessing financial advice is because of a lack of a trust - the FOFA reforms allowed the sector to rebuild that trust and to grow," opposition financial services spokesman Bernie Ripoll said.

Public submissions on the government's proposed changes close this week.


2 min read

Published

Source: AAP


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