FOFA not a concern for consumers
Consumers are not concerned about the Future of Financial Advice (FOFA) reforms or the ongoing debate between various industry bodies but about having adequate savings, superannuation and life insurance.
Wealthtrac chief executive and managing director Matthew Johnson said consumers are “not discussing the ins and outs of FOFA but they do know they need help in working out how to plan for their future financial goals”.
“If you take a look at recent comments around superannuation the debate has been around returns and fee levels, but genuine advice should be about the value in the end product - and financial planners should articulate what value good advice provides,” Johnson said.
He said that some planners have struggled to articulate their value proposition because they were not paid for providing advice through commission payment systems, but FOFA had broken that connection.
“FOFA has separated product from advice, which is a good thing, and financial planners should be providing advice for what consumers want, and they do know what they want,” Johnson said.
“They are looking for superannuation and retirement solutions, income protection and savings advice and not the details of the FOFA amendments.
“The industry should not be wrapped in these latter issues but be talking about longevity risk and adequate savings. Given Australia is the fourth largest superannuation market in the world, the question is why are we not talking about these issues?”
Johnson said consumers were better off gaining financial planning advice, as the end result was not just about returns but also about ensuring that the adequacy of those returns matched their insurance needs, estate planning and pension requirements.
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