AFA: Senate committee recommendations good for consumers

The Association of Financial Advisers (AFA) has expressed support for a number of Senate Committee recommendations aimed at increasing advice standards, consumer trust and the professional behaviour of financial advisers and planners.

AFA CEO Brad Fox said the report handed down by the Senate Economics References Committee (the Report) identified inappropriate advice behaviours. “The AFA condemns the behaviours identified in the Report,” he said. “The trust of consumers has been breached and that is simply not good enough. Some of the recommendations in the Report are consistent with our views on what is required to further the evolution of financial advice into a trusted profession.”

Mr Fox said the AFA Code of Ethics is very clear that members cannot act in the ways identified in the Report.  “While our members are not implicated in the Report, the AFA’s empathy and understanding is extended to consumers who were affected.”

In referring to some of the more than 60 recommendations from the Report, Mr Fox said the advice market must treat its release as a pivot point from which to rebuild consumer trust in financial advice.

“Thankfully, over the past five years significant momentum has been built toward professionalism in advice,” Mr Fox said. “This must continue so we never see these types of issues arise again.”

Mr Fox said the AFA encourages consumers to seek an adviser who is a member of a professional body, as these advisers subscribe to a Code of Ethics that requires professional and ethical behaviour at all times. “A professional body will hold its members to account. It is just unfortunate that not all financial advisers choose to become members.”

The AFA will consider the detail contained in the Report and subsequent recommendations. “We need to carefully review the recommendations to assess whether or not they are likely to be effective in stamping out inappropriate systemic behaviours,” he said. “What is most important is that we move forward with even more vigour towards building a universal culture of professionalism that earns the respect of the community.”