Reflecting on the federal government’s proposed changes to the Future of Financial Advice (FOFA) legislation, slated for presentation to the Cabinet this month, AFA chief executive Brad Fox told InvestorDaily that ulterior motives may underpin public commentary on the reform package.
Responding specifically to Shadow Treasurer Chris Bowen’s Twitter statement that the proposed amendments will make “another Storm, Westpoint or Trio [Capital] collapse more likely”, Mr Fox said the assertion is a misrepresentation of the truth.
“The whole way through the FOFA consultation process we have consistently said the FOFA legislation will not prevent some of these collapses we have seen – the best interests duty does not do that – these cases are about product failure, which will be looked at by the Financial Services Inquiry, not the FOFA legislation” Mr Fox said.
“It is politically convenient to say that the amendments will create another Trio, but it’s simply untrue.”
Mr Fox also took aim at the “mainstream media”, which he said was guilty of publishing untrue statements about the FOFA amendments, including the notion that the best interests duty would be removed, which he described as a “fallacy”.
The debate surrounding the FOFA amendments should be viewed within the context of competing and vested interests, the AFA chief said, indicating the AFA intends to take a “different approach” in 2014 and stay above the fray.
“You have to remember there are a lot of agendas at play here,” Mr Fox said. “All of these issues relate to one of the world’s largest superannuation pools – and the competition for that money is fierce.”
Mr Fox called on financial advisers to issue communications to clients debunking the myths about the FOFA changes perpetuated by some commentators.
