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Labor ‘scaremongering’ on FOFA

The ABC’s FactCheck project has given shadow treasurer Chris Bowen a “scaremongering” tag for his misleading commentary on the proposed amendments to FOFA.

In a post on the FactCheck website this morning, ABC researchers rejected Mr Bowen’s claim that the “government’s changes to financial advice laws will bring back the type of commissions that encouraged financial advisers to recommend risky investments”.

Instead, the ABC’s fact checkers have found that the proposed changes will only apply to some forms of general advice” adding that “they do not bring back old-style commissions”, as several commentators have previously told ifa.

“Mr Bowen is scaremongering,” the FactCheck website concludes in its ‘verdict’.

AFA chief operating officer Phil Anderson told the ABC that "licensees, who are responsible for the conduct of their representatives, will not let financial advisers sell products by the means of general advice”.

“Licensees conduct audits on client files to ensure that the advice is appropriate, and they will seek to pick up cases where advice documentation has not been provided to the client,” he added.

The FPA’s Dante De Gori said that while “the Government's amendments do not bring back commissions for financial planners” that they "may allow the big banks to provide cash incentives to their branch and call centre staff to sell complex investment and superannuation products to customers without taking into account their personal circumstances".