Reactions to the Federal Government’s proposed reform of the Future of Financial Advice (FOFA) legislation are split along the expected lines.

The financial advice industry supports the amendments outlined by Finance Minister Mathias Cormann last Friday, but industry super funds and consumer group Choice remain opposed.

The Financial Planning Association says the changes mark “a decisive victory in favour of all consumers who seek certainty in their dealings with the financial advice system”.

CEO Mark Rantall said: “FOFA began as an ambitious sprint to transform our sector, became a four-year marathon bogged in detail, and has ended as a smart-run victory to place the interests of all Australians first.

“On behalf of the professional financial planners in Australia, we welcome [the] announcement by the minister and acknowledge reason, common sense and a robust democratic process have each done their job.”

The Financial Services Council says the clear ban on commissions and retention of the six-point best-interests duty will protect consumers.  

“This response removes all doubt commissions will be introduced in the provision of general advice,” CEO John Brogden said.

“The changes outlined by the Government also maintain a detailed and comprehensive best-interests duty, requiring a financial adviser to act in the best interests of their client.”

The Association of Financial Advisers warns opposition to the changes will continue until Parliament passes the legislation.

“We have seen blatant mistruths on the FOFA issues and it is likely we will see them again now,” CEO Brad Fox said. “It is categorically wrong to say or in any way infer that the best-interests duty has been stripped away.”

Industry Super Australia has again called on the Government to shelve what it says are plans to reduce consumer protection.

“Our concern is if this wind-back of consumer protections were to eventuate, financial advice and product sales would once again be inseparable,” CEO David Whiteley said.

“The Government’s proposals – lobbied for by banks and financial planners – will create caveats and loopholes. Consumer protections should be ironclad, not subject to fine print.”

Choice has also called on the Government to abandon the changes.

“Conflicted and poor financial advice has cost consumers billions and in too many cases led to people losing their homes and life savings,” CEO Alan Kirkland said. “This is why consumer protections were originally needed and exactly why they should not be removed.”

Choice has launched a petition calling on politicians to oppose the amendments.