The principles of the Future of Financial Advice (FOFA) reforms should be extended across a broader range of financial services roles and products, and not just stop at financial planning, according to national director of the Finance Sector Union (FSU), Rod Masson.
Masson said while the FSU broadly agreed with the FOFA principles, it would like to see them applied across financial services roles, products and groups. Masson added that conflicted remuneration structures existed across a range of other financial services roles and needed to be removed.
“We understand that you can’t bite it off all at once. But if you accept the principles of the FOFA process, then it’s a natural flow that you must accept that where you have conflicted remuneration at work in other financial services those principles should stand there as well,” he said.
Masson sits on the advisory panel on financial advice and professional standards, set up as part of the FOFA consultation process, and he admitted there was some disagreement between parties. However, the FSU was in favour of the reforms package, including the contentious ‘opt in’ for continuing advice reform.
“We would say to Government that they should hold the line in terms of the announcements that they made back in April last year. It was a move in the right direction, and they shouldn’t look to compromise that,” said Masson. “If you grandfather commissions and if you are also rallying for asset-based fees to continue, then I think the least the industry should be doing is providing consumers with the opportunity to make a decision as to whether there is ongoing value from the advice they are paying for, by having them opt in to that relationship.”
He said other discussions had focused on different products, and added that the FSU was against exempting certain products from the reforms package since it would make the entire system unworkable.
“There will just be too many different, complex arrangements for different groups or products, so we think the principles should be universally applied and then we’ll get the best outcomes,” said Masson.
The frustration of FSU members rested in the overemphasis by their employers on their being a sales force as opposed to being professionals, he added.
