Speaking at a FOFA discussion in Sydney last night, the Hon Kevin Lindgren AM, QC – a former judge of the Federal Court of Australia and former acting judge of the Supreme Court of New South Wales – said he sees no way of satisfactorily resolving the problem short of legislation.
“In other words, some of the people would be licensed as truly independent financial advisers and others would be known to be salesmen, and they could go hell for leather and sell the product of the particular issuer,” Dr Lindgren said.
“I can’t see any straightforward or honest way around the language with that difficulty,” he said.
Also speaking at the event was the Hon Margaret Stone – a former judge of the Federal Court of Australia who is currently a visiting professorial fellow at the University of New South Wales.
Ms Stone, along with Dr Lindgren, believe that removing the ‘catch-all’ provision in subsection 961B(2)(g) of the FOFA legislation will make no difference.
“I am in favour of requiring advisers to act in the best interests of their clients, but I don’t actually think taking that sub-clause out causes any problems,” she said.
“It actually creates unnecessary uncertainty with people thinking ‘well what could parliament have meant?’
“In my view, what parliament meant was: ‘over to you, we can’t think of anything else’.
“It is basically my view parliament was saying to financial advisers: ‘do this, this, this and this, and we can’t think of anything else, but the burden is on you’.
“It doesn’t make a difference if subsection (2)(g) is deleted.
“I’ve thought quite hard about what a financial adviser might reasonably have to do that is not comprehended in the previous subsections, and I haven’t been able to think of it.”
Well I have my own practise under a non-aligned dealer group who is a wannabe vertically integrated player. I use a non-badged platform and avoid all biases if I can but I’m starting to get the feeling I’m being squeezed out by the big players. It’s a white label badged platform or you’re stuffed basically.
[quote name=”Rick”]This relentless ‘I’m more ethical then the next guy’ posturing only further erodes confidence in our industry as a whole. I have my own AFSL, but I certainly I don’t believe that institutionally aligned advisers are somehow of lesser quality than me. There is no perfect cure (that’s life), but advisers with a solid value proposition and high personal ethics will [u]always[/u] rise to the surface in the long run. This game of one upmanship is a distraction and utterly self-defeating. Let’s move on.[/quote]
Couldn’t agree more !!!
This relentless ‘I’m more ethical then the next guy’ posturing only further erodes confidence in our industry as a whole. I have my own AFSL, but I certainly I don’t believe that institutionally aligned advisers are somehow of lesser quality than me. There is no perfect cure (that’s life), but advisers with a solid value proposition and high personal ethics will [u]always[/u] rise to the surface in the long run. This game of one upmanship is a distraction and utterly self-defeating. Let’s move on.
Great idea. Do it!
Right-we agree, (g) is to go
But the real thorn in Arthur’s FOFA changes is the banks playing fast and loose with general advice
The whole concept of “general advice” v personal advice is a farce’ It was put there to help the ISA lot give investment advice to members without asking too many questions.
Now the banks want a piece of the risk products sold in the direct selling space
They already have a range of rubbish products to roll out ASAP.
Consumers just DO NOT UNDERSTAND the difference between general and personal advice. ASIC allows the direct selling lot to prosper because ASIC assume’s life risk customers are sophisticated enough to know the difference when they respond to misleading TV ads
And there is no way in hell that general advice passes the best interests test
So, i own my own business, which operates under an institutionally owned dealer group. I have a very broad APL, and I do not favour the institutions products over others. This makes me a ‘salesman’ rather than an adviser?
Sounds like this QC doesnt know what he is talking about.