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Chan & Naylor has warned that in its current form, the FoFA regulation will prove to be a lose-lose option for both advisers and consumers.
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Chan & Naylor warns FoFA will be lose-lose
25 August 2014
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The firm is calling on all parties with influence to consult with the wider industry ahead of further changes in order to "fix the broken regulation before long-term harm is done to both the financial advisory industry and consumers".
“Currently we are shooting ourselves in the foot by completely disregarding the original intent of this reform,” said David Hasib, a partner at Chan & Naylor Wealth Planning.
“The Palmer United Party’s proposed amendments barely scratch the surface and don’t deal with the underlying issue of how this industry has been behaving over the last 20 to 30 years,” said Mr Hasib.
“This is driven by remuneration and right now there are simply are too many noses, with vested interests, in Australia’s financial services industry trough.”
Mr Hasib said that the issue of conflicted remuneration has not been satisfactorily addressed and this will put advisers back in the firing line.
If FoFA passes to law in its current iteration then Mr Hasib believes that this will lead to a number of perturbing outcomes including increased red tape, further consumer confusion and, as the cost of doing business gets inevitably more expensive quality advice will become further removed from ordinary Australians who need it most.
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“Before any further changes are made to FoFA, the Palmer United Party and the federal government would benefit from consulting with the broader financial services industry to gain a deeper understanding of the long-standing issues," Mr Hasib said.
“If we can remove the inherent, product selling culture of the 80s & 90s, then it will be to the benefit of all Australians."
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