FOFA flaws outlined in FPA letter to independents
The Financial Planning Association (FPA) has written to the key independents in the House of Representatives seeking their support for key amendments to the Future of Financial Advice (FOFA) bills.
The letter, a copy of which has been obtained by Money Management, warns the independents that "some of the proposed measures are flawed, and when viewed in total, the FOFA reforms are insufficient in achieving significant inroads to boost consumer trust and access to financial advice".
The letter, signed by FPA chief executive Mark Rantall, says the current legislation and the Parliamentary Joint Committee's recommendations "do not deliver on the goal of improved access to financial advice, particularly in respect to the following four weaknesses:
- Start date and transition period.
- Clarity and certainty regarding how scaled advice works with best interest legislation.
- Consumers continue to face greater risk with the opt-in renewal notice requirement, as the key protection mechanism regarding advice and their options to access dispute resolution schemes will be removed for many who unwittingly neglect to opt-in.
- Additional fee disclosure statements for both existing (retrospective) and new clients are redundant. Fee disclosure obligations already exist for advisers and product providers in disclosing fees to the client."
The letter tells the independents it is intended to bring to their attention "the critical points of the respective bills that are before Parliament and which, if not addressed, will result in the FOFA reforms failing to achieve their objectives."
"We seek your support to ensure that the FOFA reforms are appropriately developed to ensure tangible and beneficial outcomes for all Australians," it said.
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