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The government is expected to move quickly to water down Labor's financial advice laws following the conclusion of an 11-week Senate inquiry. The report of the inquiry was to have been presented to the Senate on Monday night.
Introduced in July 2013 in response to a string of high-profile financial collapses, Labor's legislation imposed an overarching requirement on financial planners to act in the best interests of their clients. It also prohibited them from obtaining commissions and other forms of conflicted remuneration.
The Senate inquiry has been conducted at the same time as another one into the behaviour of the Australian Securities and Investments Commission and its handling of complaints about financial planners employed by the Commonwealth Bank. That inquiry is due to report next week.
The government is understood to want to move quickly ahead of Labor's rules becoming mandatory in July.
Before he stepped aside over an appearance before the NSW Independent Commission Against Corruption in March the then assistant treasurer Arthur Sinodinos announced plans to water down Labor's rules by regulation, circumventing the need to get amendments to Labor's laws through Parliament.
Industry Super Australia has pleaded with the government not to attempt to again try to water down the rules by regulation, something possible at executive council meetings due on June 21 and June 28.
''If the government does proceed with making such regulations, it is crucial that draft regulations are released and consulted on,'' Industry Super wrote in a last-minute note to the Senate inquiry. ''It is critical that any proposed amendment to the financial advice laws … are allowed full parliamentary scrutiny.''
The changes proposed by the Coalition would remove the requirement for financial planners to act in the ''best interests'' of their clients, leaving in place a checklist of six specific steps each planner would have to follow.
They would allow banks to pay their staff limited commissions for selling financial products and free planners of the requirement to write to their customers each year telling them how much of their money is being paid to them in ongoing commissions.
