The story so far
In late November 2014 the Senate voted to save the consumer protections in the Future of Financial Advice (FoFA) legislation. This means that CHOICE's hard-fought campaign against the government's erosion of important consumer protections has achieved its goals.
But despite this win for consumers, the fight isn't yet over. The government can still introduce legislation to water down FoFA again. CHOICE won't give up the fight until consumers are better protected from further financial advice disasters.
CHOICE has spent 20 years lobbying for independent financial advice that consumers can trust. In July we campaigned against proposals to water down the Future of Financial Advice protections, or FoFA. More than 11,000 Australian consumers signed our petition opposing the government's changes. We took these concerns to Canberra, and met with politicians from all parties. Despite these efforts, the government won a crucial vote but, thankfully, the Senate stood up and saved consumer protections in November 2014.
This means we currently have the minimum consumer protections needed when seeking financial advice. But the fight is far from over, we'll keep calling for a better deal for consumers.
CHOICE has opposed and will continue to oppose changes to that law that would allow:
- Loopholes and exceptions for an adviser's obligation to act in a client's best interest.
- Advisers to bypass the obligation to act in a client's best interest when scoping what topics to include in advice.
- Advisers to place their own or their employer's interests ahead of their clients when recommending certain products like general insurance.
- Conflicted payments, like bonuses linked to sales targets.
- Advisers not to send an annual statement of fees to clients who entered into a product before 1 July 2013.
- Advisers not to check if clients want to opt in to ongoing advice every two years. This would have stopped people paying for advice they no longer need.
- Advisers who sold certain superannuation products before 1 July 2014 to continue to collect commissions when their client retires. This will allow a lifelong commission for the sale of a product.
- Even more situations where advisers can buy and sell ongoing commissions entered into before 1 July 2013.
In August 2014, we used a major government Inquiry
to call for the removal of all conflicts in financial advice. We've also lobbied for better education and training standards
for financial advisers.
We lobbied for the original laws that helped people seeking financial advice. We called for strong protections in the Ripoll Inquiry in 2009 and when reviewing the initial FoFA legislation in 2011. We also championed the idea of a consumer compensation scheme to protect people when something goes wrong.