AFA produces FOFA facts analysis
The Association of Financial Advisers (AFA) has produced a comprehensive response which it claims debunks the claims being made by some vested industry groups that the Government's Future of Financial Advice (FOFA) changes will serve to undermine consumer protections.
In particular, the AFA response has sought to counter claims that the FOFA changes will see a reintroduction of commissions and a watering down of consumer protections via changes to the client best interests duty.
Releasing the response, AFA chief executive Brad Fox said it was regrettable the Government had seen the need to pause the FOFA amendments process, but that the AFA "welcomes the opportunity for debate to return to a facts-based discussion, rather than a rolling campaign of fiction and misrepresentation".
"Australians have been exposed to a relentless campaign of misinformation, exaggeration and scaremongering and, in the interest of consumers the time has now come to test these claims," Fox said.
He detailed those "emotive" claims as being:
• An incorrect claim that advisers will no longer need to act in the best interests of their clients
• An incorrect claim that scaled advice is an opportunity to get clients to agree to a scope of advice and then deliver it to the benefit of the financial adviser without the obligation to act in their client's best interest
• An incorrect claim that the amendments will lead to another ‘Storm Financial'-type collapse during the term of this Government
• An incorrect claim that commissions are being reinstated for financial advisers.
The AFA then gave a detailed analysis of each of the claims weighed against what it saw as the facts of the matter and said it would be taking its position into the discussion process initiated by the Minister for Finance, Senator Mathias Cormann, when he announced the regulatory pause.
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