The Future of Financial Advice legislation which came into law last week implements the legislative response to a parliamentary inquiry into the collapse of investment groups Storm Financial and Opes Prime.

The new legislation demands financial planners and advisers put the interests of their customers first, bans the payment of sales commissions and volume payments on retail investment products, and widens the scope of advice financial services clients can receive.

“Every Australian consumer can be more confident that their financial planner or adviser is putting customers’ interests first and that the advice they receive is not influenced by sales commissions,” Financial Services Minister Bill Shorten said.

During debate in the Senate, Opposition financial services spokesman Mathias Cormann accused the Government of “arrogantly shutting down debate on coalition concerns with FOFA” and committed a future coalition government to amending it.

He says Coalition amendments would include abandoning opt-in provisions for financial planners and refining the ban on commissions for risk insurance inside superannuation.

“The Government is obviously desperate to avoid scrutiny… of this deeply flawed, deeply conflicted, job-destroying FOFA package,” he said.

“Every time Mr Shorten tried to pursue the vested interest agenda of his friends in the financial services market, the rest of the industry and consumer groups and others were able to point out the deep flaws in his preferred policy approach.”

Association of Financial Advisers President Brad Fox says that despite good intentions the reforms have been “hijacked by vested interests” and that the industry is still awaiting clarification on key issues including codes of conduct and opt-in provisions.

Industry Super Network CEO David Whitely says the FOFA package is in the national interest and that industry super funds have “campaigned for over 20 years for the removal of commissions and other financial advice reforms”.

Consumer advocacy group Choice says the FOFA legislation is “a big win for consumers because advisers are now obliged to put the interests of their clients ahead of their own when providing financial advice.”