The Australian Bankers’ Association (ABA) has denied trying to undermine the Future of Financial Advice (FOFA) legislation.

Executive Director Retail Policy Diane Tate says claims the banking sector is trying to gut the reforms are “simply not true”.

“We believe in the best-interests duty and we believe that will continue under these reforms,” she told the Senate committee that is reviewing proposed changes to FOFA. “We are fully supportive of the original policy intent.”

Ms Tate says banks have made significant investments to implement the legislation.

The ABA says it sought a modified best-interests duty for basic banking products – including general insurance – from the previous Labor government.

Ms Tate says the banks want the duty to cover all basic banking products under one regulation, rather than in various parts of the legislation.

“We are not asking for an expansion of those exemptions,” she said. “What we are asking for is to have them work seamlessly.”

Ms Tate says FOFA currently exempts all such products, but only separately.

“All we want is an amendment, and there are a few places it has to be done, to make sure information and advice on those products can still be provided by one person.”

The banks’ position is opposed by the financial advice industry, which is concerned about commissions paid on general advice products.

The Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) have both addressed the hearing.

FPA CEO Mark Rantall says the association has no issue with the concept of general advice and general information.

“The issue we have is embedding commissions into products as a form of incentive payment,” he said. “We also have no issue with reasonable balanced-scorecard-type salary and bonus payments.”

FPA GM Policy and Conduct Dante De Gori says the Australian Securities and Investments Commission (ASIC) would have difficulty monitoring incentive-based sales commissions.

“That is the difficulty ASIC will have and does have with the conflicted remuneration changes anyway, in respect of how you are going to monitor the incentives,” he said.

“We are trying to remove anything that is directly embedded in that product.”

AFA CEO Brad Fox expressed his opposition to bank tellers receiving commissions for general advice. “They should be able to be recognised for their job performance, but we do not think they should get commissions on general advice.”