The Federal Opposition has drafted its Future of Financial Advice (FOFA) amendment legislation based on the 16 recommendations in its response to the parliamentary joint committee report on FOFA.

Opposition spokesman for financial services Mathias Cormann told the Financial Services Council conference on the Gold Coast last week that legislation drafts have been prepared if the coalition is elected next year.

“We have the legislation drafts amending FOFA on the 16 resolutions laid out in the parliamentary report,” he said.

“We will fix FOFA, and a coalition government will act decisively on implementing the reforms.”

The changes include repealing the controversial “opt-in” provisions and allowing commissions on products purchased by an individual either inside or outside super.

Commissions would also be allowed on life insurance purchased by individuals through a group life insurance scheme.

Senator Cormann says the current FOFA legislation is flawed because it doesn’t cut red tape or increase consumer protection.

“It doesn’t add value or help deliver high-quality advice for consumers,” he said.

“We have seen the regulatory process for financial services break down in recent years, with FOFA not complying with government best practice procedures.

“We think there is a better way to produce legislation, and a coalition government will consult with all stakeholders before introducing new regulation.”

Senator Cormann also raised the issue of the integrity of the regulators, insisting they must be independent.

“To ensure the integrity of the system, you have to ensure the impartiality of government and the regulator,” he said. “In recent times it has been getting too fluid under this government.”

Senator Cormann says the Australian Securities and Investments Commission should provide guidance on regulations, but it should leave policy to the government of the day.