Consumers abandoned by financial advice reforms

“The financial planning industry will be rubbing its hands together in glee following the Abbott Government’s proposal to scrap key reforms in the Future of Financial Advice package that aimed to protect Australians from getting a raw deal,” said Charmaine Crowe, Senior Policy Advisor.

The Australian Securities and Investment Commission (ASIC) found in 2011 that there were 3.1 million clients of financial advisers who were inactive, who may well be paying ongoing fees for little or no financial advice.[1]

“The removal of the opt-in requirement and annual disclosure statements for all clients will see potentially millions continue to pay for ‘advice’ that they don’t get.”

“Annual fee disclosure statements should be a basic consumer right and should apply to all clients, not only those who signed up after 1 July 2013.”

“FOFA wasn’t perfect, but these reforms will only serve the interests of industry and do nothing to protect clients from being ripped off by advisers.”

“CPSA calls on the Assistant Treasurer Arthur Sinodinos to not abandon important consumer protections in FOFA that were designed to safeguard the savings of Australians.”

Contact: Charmaine Crowe
Mobile: 0422 707 332

 


ASIC (2011) ‘Report 251: Review of financial advice industry practice’ September, p.5