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Industry pushes for more consumer protection under FoFA

Industry pushes for more consumer protection under FoFA Industry pushes for more consumer protection under FoFA
The financial services industry has welcomed the Finance Minister Mathias Cormann's decision to temporarily freeze the amendments to the Future of Financial Advice (FoFA) legislation, which some stakeholders believe will lead to increased consumer protection.

The Financial Planning Association (FPA) has repeatedly said that the Coalition's proposed amendments could potentially reintroduce commissions back to superannuation and investment within general advice.

FPA chief executive Mark Rantall told Financial Standard that the organisation will continue to push for an explicit ban on commissions.

"We would like to see about 2% of this legislation tightened up to guarantee consumer protection," Rantall said.

He added that "the pendulum is swinging back to a more realistic implementation of consumer requirements and reduction of red tape."

AustralianSuper chief executive Ian Silk attributed the government's sudden change of strategy to the strong campaign that some industry stakeholders, seniors and consumer organisations have launched against the proposed changes.

Speaking at yesterday's ASIC forum in Sydney, Silk said that there has been "a surprisingly strong campaign against some elements of the proposed rollback that are tilting the balance too much in the direction of advice providers and too far away from the interests of the consumers."

He said that Labor's FoFA reform "achieved a better balance, but even if the new government moves from that, it needs to be assured that the interests of consumers are paramount."

The Institute of Chartered Accountants Australia (ICAA) also welcomed the government's decision and noted that "a balance must be struck between amending existing obligations and ensuring new rules and regulations are in the best interests of consumers."

Financial Services Council chief executive John Brogden described the government's moves as "prudent and sensible."

He said that "there has been a lot of white noise and misinformation on what the proposed FoFA refinements mean for consumers."

Author: Laura Millan 
Source: Financial Standard

 

Last modified onTuesday, 25 March 2014 03:47

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