FOFA rhetoric doesn't match strategy: AFA
The original intent of the Government’s Future of Financial Advice (FOFA) reforms was to create enhanced transparency and better outcomes for investors, but this rhetoric does not match the outlined strategy.
That is the main point flowing from the Association of Financial Advisers’ (AFA) updated FOFA member pack, launched by the chief executive officer Richard Klipin (pictured) and national president Brad Fox.
The AFA reiterated its convictions that the reforms package was against the interests of consumers, advisers, small businesses and communities in regional Australia.
“FOFA has failed to strike the right balance between improving advice outcomes on the one hand, whilst retaining access and affordability for all consumers on the other,” Klipin and Fox wrote in their address to members.
The FOFA member pack had outlined the main changes announced by the Financial Services Minister Bill Shorten last month, such as the ban on risk insurance commissions in superannuation, a two-year opt-in requirement and a ban on all volume payments/sales target payments to advisers and licensees.
The document had also made clear that the debate was still in full force, but had moved from policy to a political debate, encouraging advisers to write to their local members and lobby against the FOFA reforms package as it is currently presented.
The association stated that FOFA “adopts a paternalistic policy approach and signals a return to the ‘nanny state’, where the Government dictates terms of the adviser-client relationship.”
Klipin had called for the Government to undertake a modelling process that would identify the benefits and consequences of the proposed FOFA changes.
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.
