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FoFA legislative changes pass in the House of Reps

FoFA legislative changes pass in the House of Reps
The House of Representatives has voted in favour of the government's amendments to the Future of Financial Advice (FoFA) legislation.

The members of Parliament voted following a long debate where the Coalition outlined its position in favour of the reform, while Labor and the Greens opposed the government's proposal.

The government's proposed changes to FoFA will now have to be voted for in the Senate, where Labor Senator and chair of the Economics Committee Sam Dastyari will present today a motion to disallow the changes.

As many as 82 members voted in favour of the bill in the House of Representatives, while 50 voted against.

Palmer United Party (PUP) MP Clive Palmer was not present in the House of Reps and did not intervene in the debate, even though his Senators' votes were key to block a Labor motion to disallow FoFA changes in the Senate.

Liberal MP Andrew Laming said that the Coalition was not in the debate "considering sophisticated investors who earn over quarter of $1 million a year and are able to indulge in some very, very elaborate and sophisticated financial instruments and schemes."

Instead, "we are talking about allowing more low-income people-people, for instance, in small micro businesses who do not have anyone paying them any superannuation whatsoever-to contemplate an appropriate asset mix for their future."

Labor MP Bernie Ripoll, who outlined the first version of FoFA, told the lower chamber that "this bill destroys a range of consumer protection measures in financial advice and is very much retrograde."

"They [the Coalition] have cut deals left, right and centre just to get something through the Senate and are now bringing this complex and already out-of-date bill into this House."

Industry Super Australia (ISA) chief executive David Whiteley said: "the wind-back of the FOFA laws contains a lot of fine-print. The blunt reality is that confidence in the advice industry will continue to sink because financial advisers and bank staff will continue to receive sales incentives to recommend specific products."

He added that "the changes will re-allow the payment of a range of shadow commissions and sales incentives by banks and their wealth management subsidiaries to financial advisers and frontline staff."

Author: Laura Millan
Source: Financial Standard


Last modified onThursday, 28 August 2014 03:39

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