The financial advice industry has welcomed amendments to the Future of Financial Advice (FOFA) legislation, but is concerned at the growing public opposition to the changes.

The Association of Financial Advisers says critics of the amendments have vested interests and are undermining confidence in personal advice.

CEO Brad Fox claims bodies representing the super industry are not acting in the interests of all Australians.

“We have seen gross inaccuracies being reported as facts, so the question has to be asked: how are these actions, which undermine the confidence of Baby Boomers in personal financial advice, in the best interests of Australia?

“The amendments will give clarity, so every financial advice client who wants to scrutinise the advice will be clear on whether the adviser has or has not met this robust and comprehensive duty to act in the client’s best interests.”

Mr Fox says that without the amendments, the best-interests duty will need to be tested in the courts.

“The best-interests duty will be left with a cloud hanging over it for years, and that cloud will not be cleared until court cases remove the ambiguity.”

The Financial Services Council says it has sought legal advice on the changes from leading commercial barristers Ian Jackman and Gregory Drew.

“The legal advice is clear,” CEO John Brogden said.

“The proposed amendments do not reduce in any way a financial adviser’s legal requirement to act in the best interests of their clients. Consumers will not be impacted by the amendment being proposed to the best-interests duty.” 

The Financial Planning Association (FPA) has confirmed its support for the amendment bill, which was introduced to Parliament last week.

It welcomes removal of the opt-in requirement and changes to the “catch-all” provision of the best-interests duty.

“These particular amendments have been championed by the FPA since the FOFA reforms began and we welcome them,” CEO Mark Rantall said. “The changes will reduce the cost of doing business for financial planners and the flow-on costs to consumers. It’s a win for financial planners and a win for their clients.”

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