The delay to the implementation of the FoFA amendments provides a welcome opportunity to pause and reflect. But Mark Rantall says that now it’s time to finalise the details once and for all.
Australia’s Future of Financial Advice (FoFA) reform process has absorbed many hundreds of hours over several years, involving all sides of politics; the efforts of four ministers overseeing forests of drafts and re-drafts; and at times, the dissenting voices of industry protagonists seeking to impose various agendas, mistruths and devolved political arguments on the outcome.
For its part, the Financial Planning Association (FPA) has become intimate – and influential – in the fine-tuning that we believe is required to set Australia on a worthy path. That path is to achieve workable, consumer-centric reforms of financial advice in this country, along the way setting in stone the deeper prerequisites for a profession. And that includes rejecting the reintroduction of commissions under a general advice carve-out.
Real and purposeful
These are real and purposeful objectives. They are not weasel words written for expedient political or commercial gain. They speak to the higher purpose that the FPA has pursued now for years, and they give relevance and depth to its advocacy on behalf of members and the investing public.
One of the landmark goals achieved by the FPA was to represent a simple truth that gained increasing credence with each passing month, and with all stakeholders, including a once-cynical media. The simple truth is this: at its best, what professional financial planning does is to change people’s lives for the better.
The FPA seeks outcomes that ultimately deliver greater immediate certainty to the advice profession in parallel with the long-term certainty demanded by Australian consumers.
Consumers seek trusted advice to guide and protect their lifestyles, including the reward of leading a dignified, independent retirement. Advice by its very nature is not flagrant product selling. And there should be no confusion in the consumer’s mind over these two entirely dissimilar concepts.
Clean split
It is time now for a clean split, recognised and protected in law, with everyday, clear language that signifies the crystal clear difference between advice and product sales.
The FPA wants to see professional financial advice recognised, protected and enshrined for the enduring value it creates – not ensnared in the past paradigm of the one-off, transactional value it recorded on a sales scorecard.
It is against this backdrop that we come to tying up the final loose ends of FoFA. The recent halt in proceedings by Minister Cormann is a welcome pause to step back, reflect and work to deliver those consumer-centric outcomes.
Properly finalise FoFA
It is time also for the politics, the spin and the self-interest to be put away. It is time to properly finalise FoFA, with the original consumer protection intent of the legislation firmly in mind.
As we witnessed recently, a week is a very long time in politics. However, the FPA believes its aspirations on behalf of professionalism and industry accountability, along with its desire to assure the long-term trust of Australian consumers, are well understood and well within reach.
For its part, the FPA has worked hard on behalf of the profession and Australian consumers to advocate for these pragmatic and enduring outcomes.
The FPA has made its position known with government and other stakeholders.
Yes, there have been more twists in the passage of the FoFA draft legislation than an Agatha Christie novel. Yet as we near the final chapter, it looks like the story may yet resolve with a coherent plot.
Certainty and trust
And this is a story that deserves a good ending. Australian consumers deserve the certainty and trust that flow from sensible legislative reforms.
That is, sensible reforms that enable the best possible professional financial advice to be delivered – and clearly distinguished from financial product sales – and that remove financial planners from the firing line.
