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The Future of Financial Advice (FoFA) reforms will put financial advice and products on an even playing field, according to Gerard Doherty, managing director (Australia), Fidelity International. In an exclusive interview with Professional Planner, Doherty says the various segments that make up the “broad church” that is the financial services industry should therefore apply a collective focus on the end client.
“The thing that is curious to me is that you’ve got a diverse group of people around the table and there did seem to be still this ongoing, shall we say, debate between difference views about things we’ve been debating for a number of years,” Doherty says.
“One of them is industry funds versus advisers and we’ve seen that on television with advertisements. What FoFA does, and a range of other legislation, is it lifts…advice out and sticks it out as a separate industry; a separate decision for a consumer to make. So it puts product, if you like, on an even playing field.
“The reality is, whether you’re a member of an industry fund or a member of a retail fund, a self-managed super fund investor, at some time in your life you need advice,” he says.
“We actually want the industry collectively to embrace the need for advice and embrace the need for a professional advice industry, wherever you might be in whatever segment of the market.
“At the end of the day, there’s one commonality to us and that’s the end consumer of Australia.”
Quote from a letter written by Wayne Swan
“the Government has decided not to go as far as proposing a law against product issuers cross-subsidising the advice aspect of their businesses. The only way such a law could be effectively implemented would be by forcing either the operational or structural separation of many financial institutions in Australia. Such a requirement would be extremely costly and disruptive for industry and may require the Government to pay compensation to companies affected in order for the law to be constitutionally valid.”
I am sorry but how is that a ‘level playing field’
wow, pretty clear the FoFa achieves none of this, well that depends on how well the lawyers work around it I guess? Given the intent seems to be that the rem structure of every bank adviser will be illegal, yet not a peep out of any of them, well I guess that suggests the lawyers have already found a way around it. Lets not be too hard on Gerard, he is a product provider after all
This article and opinion is so amazingly incorrect that it is hard to formulate a polite response! The future following FOFA is a complete aggregation of product and advice. There will be no advice available to consumers unless it is provided by a product group. Almost all advisers will be aligned or employed by a single product group.
A level playing field is exactly what the financial survices Synagogue does not need.
The present mess in financial services is caused by the inability to differentiate between selling and advice.
If I am a Ford car dealer, I want to sell Ford cars not give advice to a customer on the type of car that he should have. The same applies to the ANZ Bank in which I am a shareholder. I want the salesman to sell ANZ products and I want the saleman to sell lots and earn a big commission.
If a client wants advice on whether he needs a particluler product and which one, then they come to me and I will give them advice and charge them a fee.