The Future of Financial Advice (FOFA) reforms are not addressing the real issues which confront Australia, according to the Association of Financial Advisers (AFA).
AFA CEO Richard Klipin said a recent address to AFA members by the Minister for Financial Services and Superannuation, Bill Shorten revealed that while the Government is fully aware of the problems confronting Australia, including an ageing, under-advised and under-insured population, the reforms as they stand do little to address these issues.
“Mr Shorten indicated that he is not convinced that opt-in will increase the cost of and access to advice, despite being presented with solid, research-based evidence,” Mr Klipin said. “He also indicated that he is not convinced that a ban on commissions within superannuation will exacerbate Australia’s underinsurance problem, once again expressing scepticism around industry insights.”
Mr Klipin argued that it was time for the Government to produce independent evidence which demonstrates how FOFA will benefit consumers without impeding access to advice and without increasing red tape. “We also want to know how FOFA will stop the sort of product failures that prompted serial inquiries into our industry from happening again.”
AFA President, Brad Fox said, “When this Government came to power what it promised Australians was evidence-based policy decisions. Where is the evidence that opt-in and a ban on commissions within super address the problems Mr Shorten identified? Where is the rigour? The Government has not modelled a case for how they will benefit consumers. Mr Shorten said we haven’t convinced him yet – well, he hasn’t convinced us either."
Maintain the rage
Mr Fox also called for advisers to continue lobbying their Members of Parliament. “The AFA has met with and will continue to meet with politicians across the country,” he said. “But our work to improve the FOFA reforms has only just begun. In the current political climate advisers need to continue to meet with their local MPs and advocate for sensible, workable solutions.”
As well as hosting Minister Shorten at a lunch of over 440 AFA members, the AFA recently met with:
• Treasurer Wayne Swan
• Shadow Treasurer Joe Hockey
• The Shadow Assistant Treasurer and Shadow Minister for Financial Services and Superannuation, Mathias Cormann
• Minister Shorten’s key adviser
• Independent MP, Bob Katter
• Independent MP, Tony Crook
• Independent MP, Rob Oakeshott
• Independent MP, Tony Windsor
• Independent MP, Andrew Wilkie
• The Greens
• Janelle Saffin – The Federal Member for Page
• Senator Jan McLucas – Senator for Queensland
• Deb O’Neill - The Federal Member for Robertson
• Senator Chris Evans – The Minister for Tertiary Education, Skills, Jobs and Workplace Relations
Mr Klipin said the AFA welcomes Mr Shorten’s stated willingness to continue to engage in debate with stakeholders. “AFA members would like to be part of a sensible solution that creates a constructive pathway to change – in fact, their livelihoods depend on it,” he said. “Our door is open to work with the Government to build a consensus for reform.”