The Financial Services Council has accused the government of "walking away" from the "centrepiece" of the FOFA reforms by dropping the opt-in requirement for advisers.
The FSC said it was responding to FOFA amendments tabled in parliament today, maintaining that the Bill "failed to provide certainty for consumers and financial advisers" and therefore the organisation would not support it.
"Our concern is that the legislation leaves it to ASIC to administer opt-in without any certainty as to what they require to provide an exemption and what the professional standards will be," Mr Brogden said.
"Under a last minute deal between the Financial Planning Association and Industry Super Network, the Government has dropped the requirement for opt-in but will not give any certainty to consumers and advisers on the operation of the Best Interest Duty and scaleable advice," Mr Brogden added.
The FSC also said it was concerned the Bill did not clearly articulate how the Best Interest Duty would apply, "nor does it give the regulator a clear and objective measure to test whether a financial adviser has acted in the best interest of their client".
"Our fear is the lack of clarity around the Best Interest Duty will expose financial advisers to significant risk and see many disputes end up in court," said Brogden.
"We are also disappointed the legislation does not provide legal certainty for the provision of scaleable advice. This is a terrible outcome for consumers as no reputable financial services provider will be able to offer scalable advice."
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