FPA welcomes Senate recommendations in MIS report
The FPA has welcomed the recommendations made in the Senate Economics References Committee's final report on failed forestry managed investment schemes (MISs), saying it highlights the need for a clear distinction between advice and product sales.
In a statement, FPA chief executive Dante De Gori said: "The FPA recognises that thousands of Australian investors suffered when the agribusiness investment schemes collapsed. Unfortunately, many investors did not fully understand what they were buying, and believed that they had been recommended an investment which took into account their personal circumstances, when this wasn't in fact the case.
"Agribusiness MIS are highly complex products. Indeed, many FPA members have said they are so difficult to understand and justify that financial planners avoid them, and their licensees do not include them on their approved product lists. That's why the distinction between product sales and financial advice must be made clear," he said.
Mr De Gori added that the reform of agribusiness MIS should be part of a "wider, comprehensive" reform of the Australian financial services system.
"The FOFA reforms are a positive step, but the fact is that many of the product failures and consumer losses associated with agribusiness MIS are the consequence of inadequate leadership in responding to the financialisation of Australian society," he said.
In addition, Mr De Gori said the FPA has been working with the government, regulators and the industry to improve the standards of advice provided to consumers.
These include its higher levels of planner education, guiding financial planners on delivering best practice advice, and initiatives to improve consumers' financial literacy.
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