CHOICE welcomes historic FoFA reforms
20 year campaign puts consumers in the driver’s seat when seeking financial advice
CHOICE welcomes the passing of the historic financial advice reform bill and congratulates Minister Shorten and the government for putting an end to secret payments that have distorted advice and eroded consumers’ hard earned savings.
Many of the reforms that passed today reflect CHOICE’s 20 year campaign for improvements to the way the financial advice industry operates.
“These reforms put consumers in the driver’s seat when it comes to seeking financial advice and ensures advisors have to act in their client’s best interests,” says CHOICE Chair, Jenni Mack.
“The changes also mean that consumers will soon be able to receive advice that is relevant to their particular needs or life stage. They mean advisers must put consumers’ interests ahead of their own. They put the industry on the path to professionalism.”
CHOICE says the final Bill has accommodated the concerns of industry whilst retaining its integrity particularly around opt-in by offering industry an alternative to opt-in through ASIC's code approval process.
CHOICE encourages industry associations to develop ASIC approved professional practice standards that obviate the need for opt-in.
“While we are disappointed advisers will not be required to give consumers a forward estimate of fees, mandatory opt-in will provide a very strong safeguard for new clients,” says Ms Mack.
“Opt-in will protect consumers if advisers seek to place them into inappropriate ongoing advice relationships. Opt-in will also give clients the opportunity to question whether they really need ongoing advice and many simply don’t.”
CHOICE says that while opt-in will protect new clients, existing clients may well have to switch advisers if they want to get the full benefit of these reforms.
• Jenni Mack, CHOICE Chair: 0429 300 458
• Christopher Zinn: Director of Campaigns and Communications: 0425 296 442