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AFA: FoFA side deals not in the national interest

22 Mar 2012
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The Association of Financial Advisers (AFA) is calling on the Government to act in the national interest and work directly with the industry to achieve the required changes rather than negotiating through the Industry Super Network (ISN).

The call comes after news in the press yesterday which alleges the ISN has made secret side deals with a financial services industry group on issues relating to the proposed Future of Financial Advice (FOFA) reforms, such as the highly-contentious opt-in provisions and the use of the term ‘financial planner’.

“If the allegations are true, ISN is acting as a de facto policymaker on behalf of the Government. It is time for this kind of activity to end,” said AFA CEO Richard Klipin.

“In the interests of consumers and the people who serve them, the Minister for Financial Services and Superannuation must fully focus on good policy.”

Mr Klipin said the ISN has spent countless millions on advertising campaigns over a decade or more doggedly maligning advisers and undermining the value of advice and the ISN’s role in the FOFA debate needs to be put into context:

  • They have proposed many of the contentious changes, including opt-in
  • They represent a small  number  of  industry fund advisers, which constitutes less than  one per cent (1%) of all advisers
  • The FOFA changes, as designed, will have minimal impact on industry fund advisers
  • The ISN, according to its own research, expects to increase adviser numbers tenfold in the next 15 years under the FOFA legislation
  • The ISN is a vested interest group in this debate, seeking to drive a substantial competitive advantage from this legislation.

“We believe the actions of the ISN have unfairly influenced the FOFA debate,” said Mr Klipin.

“But a golden opportunity now exists for Minister Shorten to bring all key stakeholders to the table and finalise all the key issues. This is the only way to serve the national, rather than sectional, interests.”

Mr Klipin encouraged the Independents to focus on good policy outcomes through amendments to the legislation.

“The AFA has always supported legislation which will improve transparency around advice and increase consumer access to advice,” Mr Klipin said. “However we believe that the draft FOFA legislation, as it currently stands, does neither.”

Earlier this month the AFA sent a letter outlining its five major concerns relating to the proposed FOFA legislation to the Independents, relevant frontbenchers and members of both Houses of Parliament.

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