Bowen 'scaremongering’ on FOFA reforms: ABC
Claims that the Federal Government’s proposed changes to the Future of Financial Advice (FOFA) reforms could cost retirees’ their life-savings are 'scaremongering’, according to the ABC.
The broadcaster said Opposition treasury spokesperson, Chris Bowen’s, claim that the Government’s changes would see the return of commissions that encouraged advisers to recommend risky investments, was incorrect.
The ABC’s Fact Check team found that commissions would only be paid to advisers for general advice, when a client’s objectives, financial situation and needs were not taken into account.
Mr Bowen hit out at the Government’s proposal, saying Labor’ original reforms had been introduced in response to collapses such as Westpoint, Trio and Storm Financial.
“The commissions being paid for the advice to invest in Westpoint amounted, on average, to 10 per cent of the amount invested,” he said.
“And this Government thinks that’s just fine. This Government wants to bring back laws which would enable that to happen.”
However, the Government’s proposed changes would only allow for 'conflicted remuneration’ relating to general advice if it was provided by employees of a financial services licensee recommending a product issues or sold by that person’s employer, and only if the employee had not given any personal advice to the client in the previous 12 months.
“Mr Bowen is scaremongering,” the ABC said.
“The proposed changes to the conflicted remuneration provisions do not bring back the type of commissions that financial advisers could receive before FOFA was introduced.”
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