In a statement released on Friday, the ABA said Industry Super Australia (ISA) had “misrepresented” the banking industry around the FOFA reforms.
ABA acting chief executive Diane Tate said the banking industry “strongly supports the original policy intent of the FOFA reforms, including the best interests duty and the ban on conflicted payments”.
Ms Tate said that the FOFA provisions established important consumer protections and that the banking industry is “only seeking technical amendments which will clarify and simplify the operation of the law, while maintaining these new consumer protections”.
She argued the ABA was not seeking changes to “enable banks to charge or reintroduce commissions” or “dilute the best interests duty”.
“Any claim to suggest otherwise is simply false,” she said.
Ms Tate said the ABA was, however, seeking changes to the existing basic banking exemptions implemented by the former government.
“At the moment, those exemptions don’t work properly and would result in customers having to speak to a different banker about a bank account or a home loan or general insurance product or consumer credit insurance,” she said.
Ms Tate believes changes to the exemptions will enable “consumers to get free, simple, general advice on financial products from their bank branch, their bank website and even off their smartphone”.
“FOFA was designed to improve the quality of personal advice from financial advisers,” she said.
“Financial advisers, whether they work for a bank, credit union, industry super fund or any other type of financial institution will need to meet the best interests duty if they provide personal advice to retail clients on investment products – the banking industry fully supports the best interests duty.”
