Investors promised new protection

New laws, which have just passed the Senate, would have protected investors in Trio Capital, who lost millions when that Albury based fund collapsed, Bill Shorten said.

Speaking at question time in Parliament, the Financial Services Minister said the Howard government could have passed a similar law, but didn’t.

Mr Shorten said the Future of Financial Advice bills, which have just become law would provide “the first fair dinkum reform to the future of financial advice in Australia.”

While most financial advisers in Australia provide “excellent advice,” some had not, Mr Shorten said.

Some had accepted “conflicted remuneration” from particular funds, which had caused them to give advice which harmed their clients.

“We are making sure that conflicted remuneration is eliminated,” Mr Shorten said.

The Trio collapse, in which investors lost $176 million, has been described as the biggest superannuation theft in Australia.

In a separate statement, Mr Shorten said: “ “As a result of the measures passed by the Senate … every Australian consumer can be more confident that their financial planner or adviser is putting customers’ interests first and that the advice they receive is not influenced by sales commissions.”

While the reforms will still commence from 1 July 2012 as originally announced, the application of the provisions will be voluntary until 1 July 2013,” he added.

“These changes balance consumer needs and industry requirements by giving the financial advising community more time to prepare for the reforms, while still giving early movers the opportunity to provide commission-free advice from 1 July 2012,”  Mr Shorten said.

However the Opposition has described the bills as “flawed” and accused the government of “arrogantly” shutting down debate on these measures.

Its spokesman on financial services and superannuation, Mathias Corman, said important regulations, which underpin the FOFA legislation, had still to be finalised.