FOFA driving up costs
Efforts to improve the standards of the financial planning sector are driving the cost of advice beyond the reach of average Australians, William Buck reports.
William Buck, wealth advisory director, Chris Kennedy, warned that the Future of Financial Advice (FOFA) reforms were failing to protect the people the legislation was designed to protect.
“One of the things that FOFA was designed to do was make sure the ‘little guy’ would have access to advice, but what it has actually done to a degree is cut them out because the burden of the legislation has pushed up advisor costs,” he said.
“It is taking advisors significantly more time to carry out all of the tasks required to comply with the regulations so seeking financial advice has become more expensive.
“Seeing an advisor post FOFA costs more money, but it still doesn’t guarantee people the security of the money they are about to invest so you have to question how effective it has been.”
Kennedy said the push for regulation was forcing good advisers and their clients to pay the price for the actions of a few rogue planners. sumers paying the price.
“Within big institutions where there is a vertically integrated model there are conflicts, but that doesn’t reflect the industry as a whole,” he said.
“For every bad story there’s 100 good ones and we don’t need another layer of legislation to tell us how to look after our clients.
“Most financial planning practices are good practices who are already looking after their client’s best interests. They don’t need legislation to make them do that.
“This industry saves the Government a lot of money. We provide people with good advice to grow their asset base so they’re not reliant on the Government.”
AUTHOR
Nicholas O'Donoghue
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
