Responding to a similar suggestion by David Murray in the interim FSI report – and following months of lobbying on the issue spearheaded by the FPA – the bank has formally issued a recommendation to the government on the controversial FOFA issue.
“General advice should be renamed as ‘sales’ or ‘product information’ and the term ‘advice’ should only be used in relation to personal advice,” the bank recommends.
“Commonwealth Bank believes providers of sales or product information should not be regulated as advice providers, where they are not providing financial advice,” the submission continues.
The change would have several consumer benefits, including additional “clarity for consumers of the role of financial advisers as professionals” and “improved clarity and choice for consumers over the particular services they seek”, the submission states, pointing to MySuper especially.
CBA’s submission also calls on government to “work closely with industry on feedback associated with the Treasury discussion paper in relation to the public register” of advisers, which the bank says it supports.
On the issue of vertical integration, CBA recommends that the FSI not “propose policy changes that would impact the ability of businesses to structure themselves in a vertically integrated manner”, given the competitive advantages of such a business model and the “safety and strength” it can bring to the financial sector.
Conflicts emanating from vertical integration should instead be managed via “monitoring, supervision and compliance functions with oversight from regulators”.
Does this suggest FPAs providing advice will have to stipulate when they are giving sales or product information? As distinct from personal advice?
Will this rule apply to all sales or product information givers so they can push product without it being considered personal advice. GOOD ONE.
Perhaps, they should (can) ask the question before the first interview. Something like, would you like us to provide information on this banks/institutions product lines? Or they could ask, are you just looking for advice under the term personal advice?