Financial services industry bodies have expressed their disappointment at the Parliamentary Joint Committee report supporting the Future of Financial Advice (FOFA) bills.

Financial Planning Association (FPA) CEO Mark Rantall was disappointed with the recommendations in the report.

“The original intent of FOFA was to improve transparency of, and access to, financial advice for all Australians,” he said.

“We believe the committee has missed an opportunity to recommend improvements that would deliver on the consumer protections and benefits that FOFA was originally intended.”

Mr Rantall says while some of the FPA’s concerns have been noted in the report, its recommendations have been ignored.

Financial Services Council (FSC) CEO John Brogden says he is disappointed at the committee’s unwillingness to accept industry concerns and make pragmatic changes to improve the legislation. 

“Chief among our concerns with the current legislation is that it will not allow for an effective scalable advice framework,” he said.

“Further, the ‘best interest duty’ fails to provide certainty for consumers and advisers on the parameters of their relationship.” 

Mr Brogden says the FSC will now increase its efforts to convince the Government of the need to make the legislation workable.

Association of Financial Advisers (AFA) CEO Richard Klipin says consumers need an environment that allows all participants to operate cost-effectively so that they retain affordable access to comprehensive advice.

“Many aspects of FOFA run counter to that objective,” he said.

“Retrospective annual fees and opt-in will cost both jobs and money which will ultimately drive advice away from middle-income Australians.”

Mr Klipin says the fate of the FOFA bills now relies on the independent MPs, and the AFA will continue to strongly lobby them to achieve better legislation.