Extend FOFA to general advice says FSU

The Future of Financial Advice (FOFA) rules need to be extended to general advice, according to the Finance Sector Union (FSU).

The FSU’s national industrial officer, Alicia Clancy has told the Senate Economics Committee inquiry into consumer protection in the banking, insurance and financial sector, that she believes an extension of FOFA into the general advice arena of the major banks is warranted.

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“I think the first thing we need to really look at is an extension of FOFA,” she said. “FOFA went to wealth, it put customers first—the best-interest test—but never to any general advice.”

“With insurance products, credit cards and all those sorts of things, if there is a best-interest test at a general advice level then there is a stronger push up the chain that the product has to pass a test,” Clancy told a public hearing of the committee.

“That is one of the elements we can look at—the need to pass a customer best-interest test. I think one of the harder elements is to determine a line that is, what is a bad product?”

“A process we have undergone over the last 12 months has seen the industry struggle with the concept of a bad customer outcome and [the industry] has been really loath to put a label on what a bad customer outcome is,” Clancy said.

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Why limit it to the bank arena? If this were a real concern, why wouldn't it be extended to all general advice including of course the ISA tele-operator or union 'consultants' general advice regime as well.

General advice by definition doesn't take into account the client's personal circumstances, needs or objectives. How could you assess what's in the client best interest without taking this information into account?? #Catch 22

Yes, let's have call centres complete a full client needs analysis and provide a statement of advice before being able to give general advice. This would halt progress completely. Is this what unions stand for? Way to go!

This union is half pregnant, they are supposed to be the voice for the bank workers, but by definition unions hate the banks so really who are they working for? Not the tellers as this would take income earning capacity away from them if they cant flog products over the counter. Very interesting

Why would someone go to all the effort of providing INSURANCE under Personal Advice when they can provide "General Advice" and get paid the same but can save 5 plus hours of paperwork and not have to act in anyone's best interests but you own and not have the threat of litigation as General advice was given.

ASIC with their general advice carve outs are making it harder and harder to continue to compete with sales people who can sell insurance solely based on price without any care for the needs of the client or the likelihood of claims being paid. And worse yet, no liability when things go wrong as it was not actual advice.

I cannot understand how the stricter set of compliance standards can apply to the qualified professionals who have studied and spent years in the industry when the sales representatives who have a week training can go out and do exactly what the professionals do however with less consumer protection.

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