Responding to the Parliamentary Joint Committee’s report on the Future of Financial Advice (FoFA) reforms, the Financial Services Council said it was disappointed at the Committee’s unwillingness to accept industry concerns and make pragmatic changes to the improve the legislation.
John Brogden, CEO of the Financial Services Council, said the industry would now increase its efforts to convince the Government of the need to make the legislation workable so that it delivered on the Government’s own objectives of increasing trust and confidence in financial advice, improving accessibility and reducing conflicts of interest.
“Chief among our concerns with the current legislation is that it will not allow for an effective scalable advice framework. Further, the Best Interest Duty fails to provide certainty for consumers and advisers on the parameters of their relationship,” Mr Brogden said.
“The Financial Services Council supports the overwhelming majority of the FoFA reforms. We want higher standards for financial advisers, we want a best interest duty that puts consumers’ interests first and we want an end to commissions.
“But we need to be able to provide affordable advice, not just to the Australians who receive it now, but most importantly to the millions who do not. In its current form, the legislation puts this at risk.
Commenting on the report, Mr Brogden said the Financial Services Council disagreed with the findings of the Committee: “The legislation will increase the cost of advice, reduce its accessibility for the people who need it most and see advisers leave the industry,” Mr Brogden said.