In a submission to the parliamentary committee overseeing the proposed amendments to FOFA, the ACTU said that trade unions have a stake in the regulation of financial advice because they “campaigned successfully for the introduction of compulsory super contributions”, calling on the government to enact “effective consumer protections”.
The government’s election promise to amend FOFA “gives the very strong impression that the government is more concerned to respond to intensive lobbying by the banks than in making good public policy that protects the interests of the large majority of Australians”.
“In our view, the changes contained in the draft bill, and discussed in the associated explanatory memorandum, will have the effect of undoing much of the positive change initiated by FOFA,” the ACTU submission states.
In particular, the ACTU rails against the changes proposed to the best interests duty, opt-in and fee disclosure requirements, as well as the “broadening [of] exemptions from the ban on conflicted remuneration”.
“The aim of FOFA is to improve the quality of financial advice. While the government states it supports this broad aim, the proposal to increase the instances in which conflicted remuneration can be paid runs counter to such improvement,” the submission states.
“In practice it will make it easier for banks and others to sell high-cost and inappropriate products that do not take appropriate account of the circumstances and best interests of clients.”
I just laugh at the last line of the article. Union/ISA funds would have to have the largest client base of all for clients with inappropriate products. Its not until these uninformed masses seek professional advice that this is realised. The hypocrisy is breathtaking.
Some (not many) financial planners also made submissions, as did the Corporate Super Specialist Alliance. Have a look, it’s interesting. Platinum made a submission suggesting that FoFA should not be changed from the Labor legislation – Kerr obviously doesn’t understand the consequences of Best Interest as it stands.
It’s a shame so many planners do not take the time to have a voice and just let us all get steamrolled by the vested interest groups.
Chris,
The FPA has also made a submission, though it was not reported on in this particle article it has had press coverage. FPA members can find a copy under the News section of the FPA web page.
So what are you doing about this, what is the AFA doing about this or even the FPA. or are we just going to let the ACTU, have there say without any comment from the industry bodies…??
It has got to the conflicted-union-self-interested-agenda stage – that if the unions are raving against a government policy, I think that it actually MUST be good for the GENERAL consumer!
How does a union fund planner meet best interest duty when their APL has one product? Even bank advisers are able to recommend multiple products. Funny how the union funds don’t even see the conflict of interest in their own offering. I guess that’s what happen when you run on a closed shop mentality.
I wonder how many industry super fund financial planners recommend retail super products and REAL Life/TPD insurance products versus their unitised crap that they offload to their members only to delay any claims as much as possible to suit them. Then they have the audacity to point the finger at retail planners who actually look out for our clients needs on an individual basis!