A Shot for Common Sense: AFA Welcomes Rob Oakeshott FOFA Insight


The Association of Financial Advisers (AFA) welcomes the stance taken by Independent MP Rob Oakeshott and the Shadow Minister for Financial Services and Superannuation, Senator Mathias Cormann against the proposed opt-in provision of the Future of Financial Advice (FOFA) reforms. The proposed reform would require clients to re-sign agreements with their financial advisers every two years.

“Mr Oakeshott’s comments yesterday, and Senator Cormann’s endorsement of those comments,  reveal they recognise the serious impact opt-in will have on  members of their constituencies, including small and regional financial advice practices,” AFA CEO Richard Klipin said. “We also believe they recognise the flow-on adverse effect opt-in will have on ordinary consumers who, we believe, will ultimately be priced out of advice.”

Mr Klipin also said that Mr Oakeshott’s and Senator Cormann’s comments are an indication that the concerns expressed by the advice industry about the impact of FOFA are finally starting to be heard in Canberra.

“We have consistently argued that Minister Shorten has struck the wrong balance with the proposed FOFA  changes. A number of the FOFA elements are fundamentally poor policy – bad for consumers bad for advisers, bad for the industry and bad for the country,” Mr Klipin said. “FOFA fails to address  the real needs of consumers and, according to the AFA’s Back to Basics consumer research, will only drive up the price of advice and increase red tape for consumers, advisers, licensees and product providers, for no discernable consumer benefit. Ultimately, FOFA has failed to strike the right balance between improving advice outcomes on the one hand, whilst retaining access and affordability for all consumers on the other.”

Mr Klipin said that while Mr Oakeshott’s and Senator Cormann’s stances represent a glimmer of opportunity to change bad policy, the real battle had only just begun. “We cannot as an industry afford to be anything but committed to having our voices heard,” he said. “The strategy has moved from a policy to a political debate and advisers must continue to talk to their local Members of Parliament.

“We hope that common sense will prevail  and both Mr Oakeshott and Senator Cormann have demonstrated that they are listening  and understand the implications of heavy handed policy for no beneficial outcome.”

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