The SMSF Professionals' Association of Australia has adopted a more cautionary tone than other industry lobby groups in its response to the Senate economics committee's FOFA report.
In a statement issued yesterday, SPAA chief executive Andrea Slattery raised concerns with the trajectory for the conflicted remuneration and general advice provisions of the Bill in particular, while welcoming the recommendations of the committee on the best interest duty and catch-all clause.
“We believe that the introduction of a best interest duty and the banning of conflicted remuneration were key elements of the reforms and are essential to maintaining the consumer protection focus of FOFA,” Ms Slattery said.
“Although the recommendations of the committee to clarify the operation of the legislation will change the wording in the explanatory material accompanying the legislation, the reality is this will have little effect in practice,” she added.
“If financial planning is to become a true profession and provide sound financial advice to clients, the industry needs to adopt professional characteristics that requires a delinking of the product from the imbedded remuneration arrangements, including commissions.”
Ms Slattery also said SPAA “remains committed” to the government’s amendments to remove the catch-all provision from the best interest duty and the opt-in arrangements.
“It’s our belief that these amendments will reduce compliance costs for financial advisers and enhance the ability to deliver scaled advice to consumers who are seeking a limited subset of personal financial advice.”
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