Outgoing AFA National President calls on Minister Shorten to put consumers first

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National President of the Association of Financial Advisers (AFA) Dr Jim Taggart, OAM has called on Minister Bill Shorten to become a true advocate of the financial services industry so that the interests of ordinary working Australians can best be served.

“We are calling on Mr Shorten to live up to his portfolio title and truly be the Minister for Financial Services, actively engaging, encouraging and supporting the industry so that it can properly advise consumers,” Dr Taggart said.

Dr Taggart said that before introducing any reforms, the Government needs to take a long hard look at the real needs of consumers. “There have been a lot of armchair experts, a lot of lofty rhetoric and a lot of vested interests trying to hijack the agenda, but at the end of the day, introducing so-called reforms that ultimately force the price of advice up and make access to advice more difficult will only hurt consumers.”

Dr Taggart said the global financial crisis had put a spotlight on the industry, magnifying some of its issues, “However knee-jerk responses in the form of reforms which further threaten superannuation and savings and insurance adequacy are counter-productive.”

He also argued that the industry funds anti-adviser campaign was misleading consumers and undermining consumer confidence in superannuation.

“The industry funds odious and expensive advertising campaign, with its fixation on commissions, is clouding the real issues surrounding Australia’s superannuation system and masking the real needs of consumers,” he said.

According to the AFA, the real issues include ensuring that people:

  • have enough superannuation to enjoy a comfortable retirement
  • make the right investment decisions in accordance with their risk tolerance
  • have adequate comprehensive insurance to protect themselves against life’s uncertainties
  • understand the importance of superannuation

Dr Taggart said the industry funds campaign also unfairly tarnished the reputation of advisers by inferring that advisers earning commissions are conflicted and therefore cannot operate in the best interests of their clients.

“In fact, what the AFA’s Back to Basics consumer research clearly illustrated was that consumers who use advisers highly value the financial advice they receive, regardless of how they pay for it, and are also better off and have greater peace of mind.”

Dr Taggart said he hoped Mr Shorten would recognise and acknowledge the valuable contribution financial advisers make to the overall financial well-being of millions of Australians.

“The fact of the matter is that financial advisers have helped nurse ordinary Australians through one of the worst periods in economic history,” he said.

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