Law firm Slater & Gordon has expressed its support for the Government’s draft Future of Financial Advice (FOFA) bill, released yesterday. The firm has been offering a ‘No Win – No Fee’ service since May, with the touted aim of helping clients recover losses due to “bad financial advice”.
Slater & Gordon launched the “Recover” service with the stated intention of “fill[ing] a void in the current Australian legal market by giving mum and dad investors options, including not having to pay upfront the ongoing legal costs of often expensive litigation to pursue valid claims against negligent advisers”.
The law firm praised the draft FOFA legislation for its attempt to “provide greater safeguards” for Australians using financial planners to invest in equities, property and other financial products.
Slater & Gordon commercial and project litigation national practice group leader James Higgins said the proposed reforms were an important step following the high profile collapse of Storm, Trio, Westpoint and others.
“Over recent years, we have seen tens of thousands of Australians lose their life savings because of unscrupulous financial planners providing advice that was not in their client’s interest,” Higgins said.
“We welcome these reforms, because they will go some way to restoring the trust mum and dad investors have lost over the years in the financial advisory profession,” he stated.
Higgins said the key element of the reforms included the opt-in clause, where financial advisers must secure the consent of their clients every two years if they wish to receive ongoing advice, and also the insistence that advisers must act in the best interests of clients ahead of the planner’s own interests and those of their employer.
The increased powers for the Australian Securities and Investments Commission to enforce the new elements of the reforms were also among the draft legislation’s key features, Higgins said.
