SME financial advisers reject Financial Services Council s capital buffer call afr.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from afr.com Daily Mail and Mail on Sunday newspapers.
Peter Johnston, AIOFP executive director, said he wanted funding for the CSLR to act in the best interests of consumers by separating advice from product and called on the Government to fund it appropriately.
“Both [advice and product] were forcibly intertwined in the early 1990’s when the banks established their vertically integrated models – code for in-house advisers selling in-house products – an unfortunate event for consumers and the industry in general,” Johnston said.
“There is ample evidence that Commissioner Hayne, the Australian Labor Party and Coalition politicians wanted to commence the scheme from 1 January, 2008.
“Please consider that a disproportionate ratio of funding allocated to advisers will be passed directly back to their clients – putting affordability of advice even further out of reach for consumers.
“An adviser puts in the research, they will go through a due diligence process and that’s why we have approved product lists, and there is a certain amount of research that goes into that,” Osborne said.
“If the product provider has been shielding things from the research process… unfortunately what has happened in the past is that the adviser has been held accountable.”
Osborne said advisers had been held responsible for lack of disclosures by product makers, which the Australian Securities and Investments Commission (ASIC) failed to pick up on.
“It’s something that needs to be taken into account, simply because a product actually failed it does not mean the adviser has failed in their attempts to work in a client’s best interest and perform their due diligence,” Osborne said.
It also said the issue of product failure should be recognised of the product issuer, not advisers, assuming all reasonable due diligence was carried out.
Research houses and the Australian Securities Investments Commission (ASIC) should also take responsibility for the issue of documents such as product profiles and product disclosure statements of product providers.
It also wanted the role of the licensee in providing administration and compliance assistance to be recognised and utilised to assist in reducing compliance costs that were ultimately passed on to clients.
The streamlined regulatory function should also not lose the current expertise required to support a major transition period in the industry, while also recognising the way advice services were delivered.
Financial advisers say education, not FOFA, pushing up cost of advice
Save
Share
The Coalitionâs controversial financial adviser education reforms are more to blame for escalating fees than Laborâs Future of Financial Advice laws, say practitioners, breaking ranks with the $3 trillion industryâs peak body.
The Financial Services Council on Monday unveiled a plan to reduce the costs of financial advice by scrapping lengthy âstatements of adviceâ and removing the âsafe harbour stepsâ by which advisers can demonstrate they have complied with their fiduciary duty â a key tenet of the Rudd-Gillard governmentâs landmark 2012 reforms of the troubled sector.