Treasurer Josh Frydenberg must act to close the loophole the Coalition created in the financial protection laws which leave billions of dollars in savings at risk from poor financial advice.
 
The Treasurer must also explain why he has ignored advice from the corporate regulator to act on the high-risk investment schemes which are being promoted to retail investors because of the loophole.
 
In 2014 the Coalition created an exemption to Labor’s Future of Financial Advice laws which has led to more than $20 billion being invested in Listed Investment Companies and Trusts fuelled by commission payments to advisers which are otherwise prohibited.
 
Today it has been revealed through Freedom of Information documents obtained by the Australian Financial Review that the corporate regulator ASIC specifically advised the Coalition against changing the financial protection laws.
 
The documents also reveal an advice from ASIC in August last year which shows a direct link between commissions paid to advisers and poor investment returns in the Listed Investment Companies. The loophole created by the Coalition means that investors may have lost millions in underperforming funds.
 
It is clear that the Government has learned nothing from the Hayne Banking Royal Commission, the establishment of which it voted against 26 times.
 
This is another example of the Government failing to protect the retirement incomes of everyday Australians. It has still only implemented 6 of the 76 recommendations of the Hayne Royal Commission.