How The Advice Shake-Up Affects You

Posted on July 16th, 2013 · Posted in News

Similar to recent legislative changes within the Finance Broking Industry, the Financial Advice Industry is now entering its biggest shake-up in nearly 10 years in an attempt to bring transparency and fairness to Australians.  The long-awaited changes under the Future of Financial Advice (FOFA) reforms began 01 July 2013 and include the removal of commission-based advice to bring confidence and trust to financial advisers who for a long time have been given a bad name.  The changes aim to bring cheaper and fairer advice and make advisers accountable and transparent.  Here is a summary:

In your best interests: There are some good financial advisers but there are others who have sought to do the wrong thing by clients.  Now there will be a minimum standard which makes it very clear to all financial advisers to prioritise the need and interests of their clients first.  The reforms will ensure clients do not have to question whether their interests are at the forefront of advice given.

Ban on commissions: Consumers will be able to trust that the advice they receive is not influenced by product commissions.

Opt-In: A two-yearly opt-in arrangement has kicked in to ensure consumers are more engaged with their financial advice and advisers must provide annual statements to clients  about the ongoing fees.  This means advisers and product manufacturers will have to compete for clients on cost.

Low cost advice: Greater availability of low-cost advice on single issues through the expansion of scaled advice.

Stronger Powers: Investment regulator ASIC will have greater powers to remove licensees and individual advisers from the industry.

Planning is an important part of your financial future.  Contact us today to put you in touch with a number of trusted financial advisers who can assist you with your family’s planning needs and Strengthen Your Financial Future.