CONSUMER groups have urged the federal government not to delay its looming reforms on financial advice, warning that any move to push back the start of the new laws would cause consumers' savings to continue to be ''inappropriately eroded'' by commissions.
But the financial planning industry has repeated its calls for a delay, while warning that the reforms would result in job losses as hundreds of planners left the industry and costs to consumers increased.
According to research from the Financial Services Council, which represents big planning groups and retail super funds, the reforms would cost the advice sector $700 million to put in place and $375 million each year - costs that chief executive John Brogden said would make financial advice unaffordable for many Australians.
Yesterday, industry groups appeared before a parliamentary committee hearing examining the government's Future of Financial Advice legislation, which aims to stamp out conflicts of interest in financial advice and better protect consumers from unscrupulous operators.
The reforms, now before Parliament, follow a string of investment collapses, including Westpoint, Storm Financial and Trio Capital, that hit retail investors.
The FOFA legislation includes a requirement for financial advisers to act in their clients' best interests, bans financial advisers from receiving conflicted payments like commissions, and increases the powers of the corporate regulator to refuse or cancel financial services licences.
Most of the reforms are due to be introduced on July 1, despite being unlikely to clear Parliament for several months. Industry groups yesterday pressed for the bulk of the reforms to be pushed back until July 2013, to give the industry time to adjust.
But Sydney Law School's Joanna Bird, representing consumer groups including Choice, said the industry had been given enough time to prepare, and any further delay would have a ''severe'' impact on consumers.
Financial Services Minister Bill Shorten has signalled that he is open to considering requests to push the reforms back a year. His office has previously flagged that a decision on any delay will be announced this month.
Yesterday, his office said: ''The minister will monitor the views of stakeholders but we are determined to proceed with the reforms.''
