General advice amendments not relevant to financial advisers

association-of-financial-advisers/financial-advisers/AFA/FOFA/brad-fox/financial-advice/parliamentary-joint-committee/

17 February 2014
| By Staff |
image
image
expand image

The Association of Financial Advisers (AFA) says general advice amendments have no bearing on the activities of financial advisers who provide personal advice and have established relationships with their clients.  

The AFA dismissed recent reports that the general advice exemption proposed under the Future of Financial Advice (FOFA) amendments will mean conflicted remuneration will be paid to financial advisers. 

The general advice amendments were drafted to help banks and call centres, which provide general advice services, it said. 

“The interpretation of the FOFA amendments relating to general advice has been reported as meaning that financial advisers will provide general advice in order to be able to receive conflicted remuneration,” AFA CEO Brad Fox said. 

“These claims are a misinterpretation of the purpose of the draft FOFA amendments. 

“Unfortunately these recent reports on the general advice exemption could be interpreted to mean that financial advisers are seeking to exploit the FOFA amendments and continue to use conflicted remuneration models,” Fox said. 

The exemption for general advice was part of the Coalition’s policy position on FOFA and goes back to its dissenting report to the Parliamentary Joint Committee inquiry into FOFA in February 2012. 

The AFA said financial advisers should not be providing general advice for many reasons, including that it is not possible for an adviser to claim their advice is general for an existing client where an adviser is well versed with their personal circumstances. 

Also, product providers who do not know what sort of advice clients are getting will not simply agree to pay commission to financial advisers for general advice. 

They would be violating conflicted remuneration rules if the advice was personal. 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks 1 day ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 6 days ago

TOP PERFORMING FUNDS