FoFA run out tide exposes naked truth of product sales dressed as advice
The Financial Planning Association of Australia (FPA) says the gravitational pull of consumer demand cannot be ignored and will strip bare the stark difference between product sales and appropriate, consumer-centric financial advice.
With the corporate regulator last week issuing a blunt directive to reopen compensation claims for some 4000 clients of shoddy practice, the FPA has reiterated its previously stated position to formally distinguish the difference between product sales from advice.
“What we need here is a surgical cut. FoFA began as a set of ideals for the future of financial advice. But without formal moves to forever separate product from advice we would not only promote an opaque future but would have missed a chance to make historic professional and consumer centric reforms that lead the world,” said FPA CEO Mark Rantall.
Mr Rantall said the FPA has its eye firmly on these remaining 30 days leading to an expected announcement from the Government on its final form of FoFA on June 17.
“FoFA is an acronym we are all familiar with. But SoPA – or separation of product, advice – is the one to watch. It’s only 30 days away, but we are an eternity from seeing comprehensive and viable protections that offer an appropriate safe haven to investors who should expect that financial advice – not product sales – always be given in their best interest.
There is still time. The FPA will unveil its 10-point plan to create enduring change on behalf of Australian consumers and the professional financial planners who serve them in coming days.
FPA CEO Mark Rantall concluded: “One of my favourite Warren Buffett quotes is that ‘only when the tide goes out do you discover who has been swimming naked.
“As the water level drops and consumer expectations rise, those brandishing the garb of education, ethics and highly qualified professional advice as a member of an accredited professional community will be very glad of their choice”.