The Future of Financial Advice reforms have drawn more flak than they have praise. The financial planning community in particular have come out strongly against FoFA, with surveys of financial planners finding that FoFA will likely increase both red tape and costs as well as make harder to do business. The Association of Financial Advisers also believes that while the original intent of FoFA was commendable, the execution of it will leave consumers hung out to dry.
However, when Minister Shorten told #nomorepractice2 that he believes most financial planners would accept most of the changes. “The government’s pragmatic, I’m pragmatic, we’ll work these issues out,” he said.
But will they really be worked out? How much room is there for compromise and is there a middle way that will keep everyone reasonably happy?
Minister Shorten acknowledges that the two contentious issues are the ban on commissions on risk products within superannuation and a requirement for investors to opt-in to their advice agreement every two years. However, some industry players observe that advisers who rely on passive income streams from inactive clients rightly deserve to be afraid of FoFA.
So where does the fairness lie in FoFA? Is it possible to clean up the industry in a way that does not impose more red tape and cost? Get involved in the debate. #nomorepractice2 is an online community for financial planners, and policy makers are directly involved in the discussion. FoFA is one of the biggest changes in the history of financial planning for the industry, so have your say and make your voice heard.
