Choice: Abandon financial advice protections
WHILE changes to national financial advice rules have been put on ice by the Abbott government, at least one consumer advocate group is calling for them to be abandoned altogether.
Consumer group Choice on Wednesday called for the winding back of the government's future of financial advice protections, in a submission to a parliamentary inquiry.
The protections, introduced by the previous government, were proposed to be changed to allow financial advisers not to declare commissions they may receive for products they sell clients.
But Finance Minister Mathias Cormann earlier this year said he was setting aside the planned changes, pending more consultations, after seniors groups and the industry itself baulked at the changes.
A survey by Choice in the submission found some 81% of respondents were worried about the prospect that bank tellers could up-sell customers to complex financial products.
The submission, endorsed by several other consumers' advocates, recommended the government's reforms be abandoned "as it will expose consumers to unnecessary financial risk".
Choice chief executive Alan Kirkland said the group's research had found that when the reforms were explained in plain English, many consumers were worried about them.
"It's important to remember that FoFA was introduced last year to clean up the financial advice industry and these protections have barely been implemented before this move to water them down," he said.
"Financial advisers should be required to act in a client's best interests - full stop.
"And their advice should not be clouded by commissions that reward them based on how much of a particular product they sell."