Notice given 19 December 2011

1496  Senator Bushby: To ask the Minister representing the Treasurer—In regard to the Future of Financial Advice (FoFA) package of reforms:

(1) How many:

(a) new customers will be impacted directly by the FoFA reforms (e.g. need to make a decision on payment of advise, need to complete forms etc);

(b) existing customers will be impacted directly by the FoFA reforms (e.g. need to make a decision on payment of advice, need to complete forms etc);

(c) customers will be either directly or indirectly impacted by the FoFA reforms, to what effect, and can a financial benefit analysis be provided of these impacts;

(d) financial planners will be impacted by the FoFA reforms; and

(e) financial planning businesses will be impacted by the FoFA reforms.

(2) (a) What is the current state of competition in the financial advice industry-is the industry in a high, moderate or low competitive state; and (b) will the FoFA reforms erect additional barriers to entry for new financial planning businesses and superannuation funds.

(3) Given that media commentary indicates that the FoFA reforms will lead to even greater concentration in the advice industry, has the department discussed this matter with its competition experts; if so, with what results.

(4) (a) What will the impact of the FoFA reforms be on the underlying cost structures of financial planning businesses; and (b) for those businesses that are ASX-listed what will be the impact on their share price.

(5) What is the average hourly cost of financial advice for both in-house super advice and for comprehensive financial advice.

 (6) What will be the cost of advice in the 3 years following the FoFA reforms for both in-house and externally provided comprehensive advice.

(7) What will be the impact of the FoFA reforms on the underlying cost structures for financial advice businesses.

(8) What will be the impact on employment in the financial advice sector resulting from the FoFA reforms.

(9) In relation to product providers which allow their customers to pay for advice via deduction from their superannuation fund balances: (a) what will be the cost of building new systems to meet the new regulatory requirements; and (b) how will these cost impositions be funded-will they be: (i) passed on to customers, (ii) amortised via lower returns, or (iii) paid for from shareholder funds from the head entity.

(10) How many customers will complete an opt-in form and thereby agree to maintain their advisor relationship.

(11) (a) Does the department agree with the Financial Ombudsman Service (FOS) submission that the opt-in system will result in some consumers unwittingly losing their financial advice facility (e.g. mail lost, not opened, deadline date ignored, or simple consumer inertia), and therefore losing access to the FOS in the event of financial loss which they believe has been occasioned by bad advice; and (b) what will be the likely magnitude of this problem and what measures are needed to ensure that such losses are not systemic.

(12) Assuming that the FoFA reforms gain passage during the Autumn sittings of Parliament: (a) what will be the time period for funds and advisers to build systems to comply with the FOS requirements; and (b) how does this preparation time compare to the time which applied to the introduction of the Corporate Law Economic Reform Program (CLERP) 4, CLERP 6, anti-money laundering reforms/Financial Action Task Force, and the financial services reforms.

(13) (a) What additional costs to the industry will be caused by not aligning the MySuper changes with the FoFA reforms; and (b) what will be the impact on customers and funds of this mutually exclusive approach to reform applying to the same industry.

1498  Senator Ronaldson: To ask the Minister representing the Minister for Foreign Affairs—At any time since the Minister’s election to Parliament on 3 October 1998:

(1) Was the Minister aware of the $66 050 donated to the Queensland Branch of the Australian Labor Party by Sunland Group Limited between 1998 and 2004.

(2) Was the minister in attendance at any of the fundraising functions which have raised money from Sunland Group Limited for any branch of the Australian Labor Party.