Fofa
The potential underlying demand for financial advice in Australia has never been stronger. The demographics are well understood and researched, including our rapidly-ageing population dominated by the retiring baby boomer generation; the government offloading ever-greater responsibility for retirement funding onto individuals, and super balances approaching critical mass.
Since the announcement of the Future of Financial Advice (FoFA) reforms, there has been much debate as to how these reforms will impact on the provision of financial advice in Australia.
The majority of industry participants already provide professional and valuable services that do not require legislative reforms. However due to the collapse of Storm Financial and Opes Prime, the government identified the need for reforms to improve industry standards.The FoFA reforms aim to ‘underpin trust and confidence in the financial planning industry’ and prevent financial planners from making inappropriate recommendations to consumers.
In order for FoFA to underpin trust and confidence in financial planners, it needs to create a regulatory framework for the industry to advance towards a client centric and ethical professional Service.
Some industry bodies believe that the reforms are the next logical step for consumers accessing advice and developing the industry towards professional standards which make financial planners more ethical in their approach. A good example of this is The Financial Planning Association’s (FPA) Code of Ethics. The eight principles in the Code of Ethics serve as minimum benchmarks for professional behaviour. Accordingly, the principles act as a point of reference for all stakeholder including members, users of financial planning services, regulators and government. The FPA, Australia’s leading professional body for financial planning professionals, recognises and encourages other industry participants (e.g. non-members who provide financial planning services,
Since the announcement of the Future of Financial Advice (FoFA) reforms, there has been much debate as to how these reforms will impact on the provision of financial advice in Australia.
The majority of industry participants already provide professional and valuable services that do not require legislative reforms. However due to the collapse of Storm Financial and Opes Prime, the government identified the need for reforms to improve industry standards.The FoFA reforms aim to ‘underpin trust and confidence in the financial planning industry’ and prevent financial planners from making inappropriate recommendations to consumers.
In order for FoFA to underpin trust and confidence in financial planners, it needs to create a regulatory framework for the industry to advance towards a client centric and ethical professional Service.
Some industry bodies believe that the reforms are the next logical step for consumers accessing advice and developing the industry towards professional standards which make financial planners more ethical in their approach. A good example of this is The Financial Planning Association’s (FPA) Code of Ethics. The eight principles in the Code of Ethics serve as minimum benchmarks for professional behaviour. Accordingly, the principles act as a point of reference for all stakeholder including members, users of financial planning services, regulators and government. The FPA, Australia’s leading professional body for financial planning professionals, recognises and encourages other industry participants (e.g. non-members who provide financial planning services,
References: Australian Securities and Investment Commission, ‘Shadow shopping study of retirement advice’ (Report 279, 27 March 2012) Decimal, ‘Beyond FOFA – five fault lines shaping the ‘real’ future of financial advice’ (2011) Financial Services Authority, ‘Retail Distribution Review: Independent and restricted advice’ (Finalised Guidance, June 2012) Future of Financial Advice ‘ Overhaul of Financial Advices’ viewed 29 September Extension’ report prepared for the Financial Services Council (18 January 2011) Maiser, D Marcus, A.P. “The Future of Financial Advice Reforms: Restoring Public Trust and Confidence in Financial Advisers – An Unfinished Puzzle” Canberra Law Review (2011) Schiffman, L. Bednall, D. O’Cass, A. Paladino, A. Ward, S. Kanuk, L. “Consumer Behaviour” Pearson Education Australia (2008)