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Global survey finds FOFA concerns

A global study of CFA Institute members has found almost half of respondents believe “mis-selling” by Australian financial advisers is a major ethical problem not addressed by FOFA.

In its annual survey of 6,561 international Chartered Financial Analyst charterholders, the CFA Institute found a marked increase in the number of respondents who believe “mis-selling” by financial advisers is the “most serious ethical issue facing the local market in the coming year”.

Almost half (48 per cent) of respondents gave this response – up from 36 per cent last year, indicating the issue is a growing concern for these stakeholders.

CFA Society Australian spokesperson Jason Chesters said the results indicate CFAs are not convinced the Future of Financial Advice reforms are achieving their aim.

“Our Australian members are showing increasing concern that the [FOFA] reforms have yet to address the issue of mis-selling by financial advisers,” Mr Chesters said.

“This is perhaps exacerbated by indications that the new government will change ‘best interest’ provisions as part of the roll-back of FOFA.

“We acknowledge the government’s desire to reduce red tape but encourage it to implement policy that improves Australians’ access to high quality advice that is in their best interest.

“A strong foundation in ethical principles and standards is essential across the financial services industry to regain the trust of investors, but perhaps no more so than in the provision of advice.”