Changes to the Future of Financial Advice (FOFA) legislation have been slowed, with the Senate referring the amendment bill to the Finance and Public Administration Legislation Committee.

Senators want the committee to give “a forensic and detailed examination of the legislation and the impacts this and previous reforms will have on the financial services sector”.

The committee, which is due to report by June 16, will seek evidence from “key financial service and consumer stakeholders, regulators and Treasury”.

The controversial amendment bill – introduced into the House of Representatives last week – includes the Coalition Government’s pre-election promise to remove the “catch-all” requirement in FOFA’s best-interests clause.

The current legislation requires advisers to complete six steps under the “safe harbour” provisions, but also to take “any other step that would reasonably be regarded as being in the best interests of the client”.

Critics of the clause’s removal argue it will scrap the best-interests duty for brokers and advisers, leaving consumers worse off.

Supporters of its removal argue the current legislation’s wording leaves brokers and advisers open to legal action with little chance of defending themselves.

Introducing the amendment bill to the lower house, Parliamentary Secretary to the Treasurer Steven Ciobo told MPs the financial services industry deems the clause “unworkable”.

“Let me be clear: this bill does not remove the requirement for advisers to act in the best interests of their clients,” he said.

“Without the catch-all provision, the best-interests duty will continue to ensure that an adviser is taking the necessary steps to properly consider the client’s circumstances, to conduct reasonable investigations into products that would meet the client’s objectives and needs and to exercise judgement in formulating the advice for their client.”

Mr Ciobo says FOFA would still require advisers to put client interests ahead of their own.

The amendments would also remove some requirement on scaled advice.

“We are told the current legislation has resulted in increased costs and significant legal uncertainty for advisers, who do not feel it truly allows them to provide scaled advice to their clients,” Mr Ciobo said.

“This bill will explicitly permit scaled advice. Advisers will be able to limit the scope of the advice to a particular area, as agreed with the client.”

He says the reform will allow advisers to provide low-cost services and let more consumers access advice.