A future Liberal-National Coalition federal government would not repeal the Future of Financial Advice (FOFA) bill, Shadow Assistant Treasurer Mathias Cormann told a Melbourne event last week.

“We would not repeal FOFA full stop, but if the Government passes the bad elements in the bill, we will reverse those,” he told an Association of Financial Advisers breakfast.

“We will reverse the bad policy decisions such as opt-in and commissions on life insurance within superannuation.”

Senator Cormann says the coalition supports a robust regulatory framework for the financial services industry that leads to good advice.

“We believe it is important to focus on policy initiatives that will improve things and not just take in long-standing vested interests.”

He says opt-in and commissions have nothing to do with stopping recent problems such as the collapse of investment houses Storm and Westpoint.

“FOFA is an agenda targeting small business, which is what most financial advisers are,” he said. “If we have opt-in every two years, it will just increase red tape for advisers and we say the principle is wrong.”

Senator Cormann says the coalition has no problems with payments such as commissions as long as they are transparent, but consumers should be allowed to choose how they pay for their advice.

“It is not up to the Government to decide that for them,” he said. “We trust people to make the best decisions on their financial future.”

He says Federal Treasury estimates it will cost the average financial adviser $100,000 a year for the opt-in proposals. No other regulatory authority in the world has come up with such a proposal, which suggests it’s not good for consumers.

The senator also cited the UK’s attempt at banning commissions for life insurance and then reverting back to the traditional payment method as another example of how Labor had made a mistake with this policy.

“The Government is trying to wear down the [financial services] industry to accept the reforms,” he said.

“Shorten is making up policy on the run, allowing some risk insurance commissions in superannuation and banning others.”

Senator Cormann says a lot of detail is still missing in the FOFA proposals and after a year there is still no legislation before parliament.

“The Government is causing a lot of uncertainty in the industry,” he said. “We will keep talking to the cross-benchers and convince other [parliamentary] members to see the merit of our arguments on these proposals.”