The Financial Services Council (FSC) has called on the industry funds and other groups to cease their scare-mongering campaign over the Government’s changes to the Future of Financial Advice (FOFA) legislation.
Commenting on the release by the Minister for Finance and Acting Assistant Treasurer, Senator Mathias Cormann’s detailed analysis of how the Government would proceed with the FOFA changes, FSC chief executive, John Brogden, said it was “time for the misinformation and scaremongering on the best interest duty to stop”.
“Industry funds and other groups have been misleading consumers and scaring them unnecessarily,” he said.
The FSC also sought to back the Government’s approach by citing legal advice it had received with respect to financial planners’ best interest duty and the removal of the so-called “catch-all” provision.
“The FSC has legal advice from leading commercial counsels Ian Jackman SC and Gregory Drew which confirms that the removal of [the] ambiguous ‘catch-all’ phrase will not dilute the obligation of an adviser to act in the best interest of their client,” Brogden said.
“Jackman and Drew state that the removal of the ‘catch-all’ phrase in the best interests provision of the Corporations Act would not compromise the protections provided by the best interests obligation.”
“The FSC also supports the government’s move to clarify in the law the ability of a client and their adviser to agree on the advice the client seeks. By clarifying that scaled advice is possible, rather than amending the best interest duty, consumers can now be certain they will be able to access the advice that they want, which is in their best interests and is more affordable,” the FSC chief executive said.
