The federal government has failed to deliver on its promise of improving the affordability and accessibility of financial advice among Australians, a number of industry chiefs have said.
“There is no doubt that the cost of financial advice will increase as a consequence of this (the Future of Financial Advice (FOFA) reforms). When you combine the abolition of a number of payments – that we believe could have been kept – and the cost of compliance, [there’s] no doubt the sticker price for consumers will increase,” Financial Services Council chief executive John Brogden said.
Association of Financial Advisers (AFA) chief executive Richard Klipin said it was the AFA’s view that the government has let down consumers.
“There was always a need to balance the requirements for change on the one hand with sensible outcomes on the other and we don’t think Minister Shorten has struck the correct balance,” Klipin said.
“Price of advice will go up. Red tape in advice will go up. There will be winners and losers across the industry for very little discernable benefit to consumers.”
He said the AFA’s major areas of concern was the “arbitrary notion” that insurance if you are advising inside super there is one payment structure, and if you are advising outside super there’s a different payment structure.
“It’s the worst of all worlds in a sense,” he said.
“The policy is now at an end and the political debate has now started. Clearly what that means is that we will see draft legislation, so there is obviously still a bit of time to influence what the draft looks like.”
FPA chief executive Mark Rantall said the association is “broadly supportive” of the government’s announcements though is still concerned by a number of issues.
