The Federal Government has urged financial planners to pass on any savings from their Future of Financial Advice (FOFA) changes in lower costs to their clients.
The call has been made by the Assistant Treasurer, Senator Arthur Sinodinos, who said that a preliminary analysis by Treasury had estimated that the proposed FOFA amendments would save the industry around $190 million a year, with further savings of around $90 million in implementation costs.
“Consumers should be the ultimate beneficiary as businesses pass the savings onto their clients,” he said.
Sinodinos has also sought to give an assurance that while the Government’s FOFA amendments will result in changes to the best interest duty, this will not undermine the effectiveness of the measure.
“The best interests duty will continue to provide a high degree of protection against poor quality advice, as advisers will be required to satisfy six provisions to prove that they have acted in their client’s best interest,” he said.
The minister said the Government was also in the process of amending the best interests duty to better facilitate the provision of scaled advice.
“Our proposed amendments will leave no doubt in the minds of advisers that they can offer scaled advice, which will increase affordability and improve consumer access to the financial advice system,” he said.
