Financial advisers rejoiced when changes to the Future of Financial Advice reforms were announced at the end of December, but others within the industry are scaremongering, said the FPA.
“We have seen a predictable reaction to these amendments from sectors of the superannuation product industry, using fear and misinformation to once again depict financial planners in a negative light,” said FPA chief executive Mark Rantall.
“Our position on these regulatory matters is quite clear: consumer protection laws remain intact and at world’s best standard. Combined with this robust legal foundation, professional financial planners who have individually subscribed to a binding code of professional practice not only have nothing to fear, they have everything to gain in this new environment.”
Earlier this week Treasury, in a regulatory impact statement, set out the practical impacts of the FOFA amendments on planners and the public.
Treasury said the amendments will save the industry around $190 million per year, with one-off savings of approximately $90 million – saving just over half of the $375 million in initial estimated costs of FOFA compliance.
The bulk of this saving is likely to come from removing opt-in, estimated to save $76.9 million.
The intent behind FOFA – better protections for the financial services’ consumer – will not be dampened by the changes, Treasury stressed.
“The proposed amendments are deregulatory and will represent a move towards a more efficient system whilst maintaining the core protections introduced by FOFA… This amendment is not expected to have any material impact on consumers,” it said.
Rantall wanted to “place on the record” that the financial advice profession operates in a world-leading environment governed by robust consumer protection laws, with a voluntary professional code of practice.
“Where others stand for product, the FPA and its members stand for advice and advice outcomes that make a lasting positive difference in the lives of all Australians. We make no judgement on those who represent their case on the basis of their product ambitions," he said.
The government has promised to make scaled advice acceptable, broaden the circumstances under which conflicted remuneration can be grandfathered, and remove the ‘catch all’ provision in the best interests duty, among other changes.
Some people working within the superannuation product industry are using fear to manipulate the public perception of financial planners, according to the Financial Planning Association of Australia.