Networth News

Welcome to the Networth News update for Thursday the 8th of September.

Coalition to remove "bad policy" in FoFA

The federal opposition has pledged to remove "bad policy" in the government's Future of Financial Advice (FoFA) reforms once elected. The Financial Review reports that Senator Mathias Cormann, the opposition's spokesman for financial services and superannuation, will call for an inquiry into the impact that FoFA will have on industry stakeholders. Senator Cormann was most concerned about the two-year opt-in proposal and said that this would make advice less affordable and add red tape for the financial planning community.

Financial planners would support FoFA without opt-in

A majority of the financial planning industry would support the Government's draft Future of Financial Advice (FoFA) legislation if the two-year opt-in requirement was dropped. Money Management reports that just over two-thirds of financial planners think the removal of the opt-in policy would leave a broadly sensible reform package. A majority of financial planners also believe the government's shift away from imposing a total ban on risk commissions inside superannuation is a sensible move and makes the FoFA draft legislation more acceptable.

Super funds cool on greenhouse gases

Superannuation funds are pulling out of companies that have high greenhouse gas outputs in a bid to reduce the impact of the carbon tax on investment returns. news.com.au reports that 14 of Australia's largest super funds have cut their carbon exposure by 25 per cent over the past three years. An Australian Institute of Superannuation Trustees survey found that the carbon footprint of these super funds is 8 per cent smaller than the carbon footprint of the ASX200 Index, indicating a slight bias towards less carbon-intensive investments. However, some portfolios invest in carbon-intensive companies in the ASX200 that will need to cut their emissions to manage financial risk from carbon costs.

Stockbrokers concerned over increased costs

The cost of trading shares could double for stockbrokers as a result of federal plans to force the industry to pay for more regulation. The Financial Review reports that stockbrokers are anxious about additional regulatory overheads and increased costs with the introduction of a second national stock exchange at the end of October. It has been estimated that an extra $18 million per year will be required to cover the costs of supervision by the Australian Securities and Investments Commission. Stockbrokers said it was unreasonable that increased regulatory costs would be passed on, which could in turn lead to higher fees for investors.