Government to weaken consumer protections in FoFA via regulation backdoor

Greens Spokesperson for Consumer Affairs, Competition Policy and Small Business, Senator Peter Whish-Wilson responds to the Government’s plans to water down consumer protections in the Future of Financial Advice (FoFA) laws via the backdoor of regulation, instead of subjecting the changes to full Parliamentary scrutiny.

Senator Whish-Wilson said, “Earlier this week I asked Acting Assistant Treasurer Mathias Cormann in Senate Question Time whether he planned to amend the FoFA rules to weaken consumer protection via the backdoor of regulation. He refused to answer. And now today, we hear that is exactly what he is doing.

“This Liberal Party is delivering for their mates in the banking sector. Recently under questioning in a Senate Committee inquiry, the Australia Banker’s Association said that they expected the government to deliver for them.

“The Greens will oppose any watering down of consumer protections in the area of financial advice. We will seek to disallow any regulations the Government bring in to water down protections at the first available opportunity.

“The Government says they are banning commissions but what they are really doing is giving advisers a myriad of other ‘conflicted’ financial incentives to push a particular financial product.

“The Government is being cute with their definition of conflicted remuneration and haven’t properly explained the difference between personal and general advice.

“They are still going to allow incentives that by any definition are conflicted remunerations such as sales-based bonuses that drive the culture that we need to change. This is particularly the case in large financial service companies and banks,” Senator Whish-Wilson concluded.

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Media contact: Tim Beshara 0409164603