Anti-hawking rules stir up industry debate

The Associationof Financial Advisers (AFA) used a meeting last week of the Financial Services Reform (FSR) Implementation Consultative Committee to call for clarification of the proposed financial services anti-hawking provisions.

The AFA is arguing that the anti-hawking provisions should not apply in circumstances where an ongoing relationship exists between an adviser and a client.

However, the Australian Consumers’ Association (ACA) has made clear it will be opposing any watering down of the provisions, particularly as they affect the rights of consumers.

The ACA’s finance policy officer Catherine Wolthuizen says a “gulf” exists in the understanding of those who support the anti-hawking provisions and those who oppose them.

However, the national president of the AFA, Joe Nowak, says that it was common sense that where a relationship already existed between an adviser and a client, the anti-hawking provisions should not apply.

The FSR Implementation Consultative Committee meeting was called by the department of Treasury to determine the views of the industry six months after the implementation of the Financial Services Reform Act (FSRA).

As well as the anti-hawking provisions, the meeting is understood to have discussed the recent Australian Securities and Investments Commission’s (ASIC) proposals on the disclosure of fees in Product Disclosure Statements (PDSs).

The ASIC proposals would require financial planners to disclose both the initial and ongoing trailing commissions they receive, as well as the source of those fees in a dedicated fee section of every PDS.