COTA Australia, the peak body for older Australians, has welcomed the move today by Opposition and cross-bench senators to work together to disallow the weakening of financial advice regulation.
Chief Executive Ian Yates said older people would be relieved that the Senators had listened to their concerns and done the right thing to ensure older Australians were not left vulnerable to poor or conflicted financial advice with the wind back of the Future of Financial Advice reforms.
“Today’s disallowance of the Future of Financial Advice regulations is a positive step towards securing the right of older people to completely independent financial advice provided in a transparent manner and fully in their best interests,” Mr Yates said.
“The Federal Government should now accept that the FOFA reforms of the last Parliament are here to stay and the appropriate discussion is where they still need further strengthening so that Australians get a financial advice profession absolutely free of conflicted remuneration.
“A strong, independent financial advice profession has to be required to put the best interests of the client first without any capacity to opt out of that.
“Education and registration of financial advisers can be part of strengthening the system but they will not replace a legal requirement for all advisers to act absolutely in the best interests of clients.
“Reducing red tape is sensible but winding back fundamental protections for every day consumers is not acceptable.
“No Australian should lose their hard-earned savings from a life of work due to bad financial advice due to conflicted loyalties as their advisor benefits from commissions or other conflicted remuneration.
“The Storm Financial, Timbercorp, Commonwealth Bank and other scandals have shown us the catastrophic impacts when investors are exposed to the self interested dealings of conflicted advisors.
“These are the high-profile cases but very importantly we must also remember the insidious impact of everyday poor advice which costs consumers retirement income while their advisors and the organisations they work for benefit,” he said.
Mr Yates called on the Federal government to now reopen discussions with stakeholders and advocates so together we can build in the protections that will ensure older people can trust the financial advice they seek and need.
Media contact: Ian Yates 0418 835 439, Jane Garcia 0434 489 533