Finance Minister Mathias Cormann.

Finance Minister Mathias Cormann. Photo: Alex Ellinghausen

Finance Minister Mathias Cormann has called a halt to the controversial watering-down of Labor's financial advice laws, less than a week after besieged colleague Arthur Sinodinos stepped down from the portfolio.

The move means the Abbott government's amended legislation will not be introduced to Parliament this week.

''I have decided to pause the process on the Future of Financial Advice regulation for the time being to enable me to consult in good faith with all relevant stakeholders before pressing the go button on our changes,'' Senator Cormann told Fairfax Media on Monday.

''We remain committed to implement the improvements to FOFA, which we took to the last election, as soon as possible.''

The Abbott government had planned to introduce the regulations winding back the consumer protections in financial advice this Friday, after Parliament rose for a six-week break.

The timing would have made it impossible for the Parliament to immediately disallow the regulations.

But the move comes in the first week after Senator Cormann took control of the policy following Senator Arthur Sinodinos' decision to step aside in the face of an Independent Commission Against Corruption inquiry in NSW.

Shadow treasurer Chris Bowen immediately accused the Abbott government of playing politics with the legislation by freezing it to prevent it from damaging the Coalition's prospects in the Western Australian Senate election in April.

But Mark Rantall, the chief executive of the Financial Planning Association, said Senator Cormann's decision to pause the legislation was a good one.

''It's a sensible move given the heat around the debate,'' Mr Rantall said.

Introduced mid-last year in response to a string of high-profile financial collapses, Labor's Future of Financial Advice Act imposes an overarching requirement on financial planners to act in the best interests of their clients.

It also bars them from obtaining sales commissions and other forms of conflicted remuneration.

The Coalition wants to remove the ''best interests'' provision, leaving in place specific requirements that are at present backed up by the provision. They also would allow advisers and clients to agree to limit the scope of advice.

The definition of ''conflicted remuneration'' would be narrowed to allow advisers to continue to receive payments in kind from product providers where advice was general rather than personal.

The Financial Planning Association opposes the return of commissions but supports the plan to remove the so-called ''catch-all'' requirement for planners to act in their client's best interests, believing it leaves planners exposed to unfair litigation.