The Federal Government’s proposed reversal of recent Future of Financial Advice reforms is likely to weaken protections for older people and other Australians relying on sound, independent advice from financial advisors, according to COTA Australia.
Chief Executive Ian Yates said COTA was very disappointed that the government has announced this reversal of FOFA reforms without consultation with consumer organisations, apparently having only talked to the advisers and finance industry providers who will benefit from these changes.
“Every older Australian should be able to access high-quality advice in which the consumer interest is paramount, to help manage investments and other financial decisions. This is particularly crucial in retirement years when replacing lost assets is impossible, health and aged care services are becoming more user pays, and every dollar counts on a fixed income,” Mr Yates said today.
“The proposed reversal of the Future of Financial Advice reforms run the risk of again exposing older people to the receipt of tainted financial advice.
“Far too many financial advisors have a poor track record in providing advice not in the consumer interest; too often their recommendations are swayed by commissions and third-party payments; and too many think the financial advice industry exists for their benefit rather than the consumer.
“COTA members believe older Australians would be best served by a ban on commissions and third -party payments to all financial advisors, including accountants.
“The Storm Financial, West Point and other financial collapses highlight just how vulnerable sections of our community are to poor quality financial advice offered to them by self-interested industry professionals.
“No Australian should suffer the indignity and hardship of losing the proceeds from a lifetime of hard work due to conflicted loyalties as their advisor benefits from commissions and other kick backs. And these are just the high profile examples – every day poor advice costs consumers funds while their advisors benefit.
“COTA calls on the Assistant Treasurer Arthur Sinodinos to meet with consumer organisations and concerned older investors for a frank discussion of the likely damaging impacts on everyday investors of these proposed changes to the FOFA reforms,” he said.
Media contact: Ian Yates 0418 835 439, Jane Garcia 0434 489 533
