Feb 20, 2014

Sinodinos’ FOFA repeal looking shaky as critics multiply

What looked in January like a sneaky win for the big banks on financial advice has turned messy for Arthur Sinodinos as more critics of his gutting of the Future of Financial Advice reforms emerge.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

While Assistant Treasurer Arthur Sinodinos is hanging tough, the fate of his effort to gut the Future of Financial Advice consumer protections looks increasingly precarious as opposition mounts, including from some unexpected quarters.

Sinodinos’ strategy was to try to do as much as possible by regulation rather than legislation and sneak a package out over summer in the hope that it would garner as little attention as possible. Until recently, the strategy seemed to be working, with only the financial press and independent outlets like Crikey focusing on what amounted to a bank cartel heist of client retirement savings. But a fortnight ago, journalists at The Australian Financial Review began pointing out the huge problems with Sinodinos’ plan, in particular the de facto restoration of commissions via what are called volume rebates, whereby planners are given a “rebate” to reflect the economies of scale that come from directing large numbers of clients into particular products.

Free Trial

Proudly annoying those in power since 2000.

Sign up for a FREE 21-day trial to keep reading and get the best of Crikey straight to your inbox

By starting a free trial, you agree to accept Crikey’s terms and conditions


Leave a comment

26 thoughts on “Sinodinos’ FOFA repeal looking shaky as critics multiply

  1. Jimmy

    Anything that removes the requirement for the planner to act in the best interest of his clients and the conflict of interest provisions is clearly flawed.

  2. rossmcg

    Fancy Sinodinis trying something sneaky. He was JW Howard’s right hand man when sneakiness was a Tory trademark. And lazy as well, too lazy to check his files before filling in his members interests form for the Senate where he forgot to mention seven company directorships. Seven. And we might see how forgetful he is if he has to front up at ICAC and talk about he didn’t really know the Obeids. Interesting days ahead for Uncle Arthur.

  3. zut alors

    The motivation for these regulatory changes is highly suspicious if not downright blatant.

    Neither Sinodinos nor Cormann has provided a logical argument for their cause. To undermine the Act is of no benefit to the wider community…so, why do it?

  4. klewso

    Bugger poor Arfa. How’s he going to face those lobbyists if he can’t deliver?

  5. klewso

    It’s the free ride he gets from even the balanced media that gets me – as if they don’t remember what he was advising Howard to do?
    As if selective amnesia is an asset in their job?
    “Mean & Tricky – Attorney’s at Lore”?

  6. Brian Williams

    Having spent many years in my previous working life at the pointy end of the finance game, the idea that Joe Public does not need the original FOFA reforms is fanciful.

    Even seasoned professionals in other fields are often only obliquely aware of the commissions rort that has been taking place in this sector for years. Some people believe that tax is legalised theft. The commissions structure that Sinodinos wants to keep in place for his mates is far worse.

  7. Thomas McLoughlin

    10 trillion dollars of value destroyed in the age of Greenspan’s light touch regulation via the GFC according to Stiglitz.

    Hello reality, meet free market ideology.

  8. bjb

    rossmcg – said exactly what I would have !

    “Instead, Sinodinos has taken the lazy, sneaky route” – I wouldn’t worry too much about Sinodinos’ future prospects Bernard – he’s the very model of a Liberal politician.

  9. Jimmyhaz


    I think this government dropped the pretense of acting in the communities best interests the moment it was elected.

    After all, the community didn’t pay for their election campaign.

  10. Liamj

    “If Sinodinos were trying to deliver this reform properly, he’d .. negotiate, consult and compromise”

    Hmm, can anyone name ANY policy area where the LNP is doing this? Tony & Barnabys drought photo-op doesn’t count, neither do the predetermined reviews on wind power & renewables target.
    And theres definately nothing in the IPAs marching orders on ‘negotiate, consult and compromise’.. so all dissenters must be godless communists, even the ones at the Fin Review. Shutup or its Manus for you all!

Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details