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Onus on consumers to ask about commissions: Sinodinos

Onus on consumers to ask about commissions: Sinodinos
Consumers must take responsibility for finding out whether their financial adviser has a conflict of interest, according to Assistant Treasurer Arthur Sinodinos.

Defending the government's proposed amendments to the Future of Financial Advice (FoFA) reforms on ABC's Lateline last night, Sinodinos said consumers must quiz financial advisers to discover whether they are indeed operating solely in the best interest of their client.

When asked how clients could be sure that the adviser was acting in their best interest when certain forms of conflicted remuneration are sanctioned, Sinodinos said:

"That's exactly the question a client has to ask. And the onus is on the adviser to answer that honestly and correctly."

He went on: "We as consumers need to get more informed, because at the end of the day that is the best sanction on financial advisers."

He said the government was committed to protecting consumers "to the extent possible".

Sinodinos also responded to legal advice obtained by Industry Super Australia (ISA) critiquing the government's plans to remove a catch-all provision requiring financial advisers to always act in a way that can "reasonably be regarded as being in the best interests of the client, given the client's relevant circumstances."

Sinodinos said: "Everything we have done has been based on the best legal advice in the Commonwealth."

He said the removal of the catch-all provision would "remove legal uncertainty and actually make it easier for financial advisers to follow that advice, which in turn will be better for consumers."

Author: James Fernyhough
Source: Financial Standard

 

Last modified onWednesday, 12 March 2014 23:49

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