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FOFA reforms
The Future of Financial Advice (FOFA)

Future of Financial Advice reforms – a contradiction in terms?

John Hewison
Founder and Director
12 Jan 2011

The federal government’s proposed Future of Financial Advice Reforms incorporates some welcome changes, like the banning of commission payments and volume bonuses. But the most interesting and challenging is the introduction of a “Fiduciary Duty”. 

Fiduciary duty means putting the client’s interest first and and must be free of any conflict of interest or product influence of any kind. Surely this is a fundamental basis for professional advice of any kind and yet this seems to be the biggest issue for the major financial planning institutions to get their heads around. This tends to indicate the degree to which product has influenced advice in the past and stands to reason where you have product manufacturers controlling something like 80% of advice providers in Australia. One has to wonder how the two tiered Dealer/Representative licensing regime in this country can effectively support the government’s Financial Advice reforms or whether we might see a change to individual adviser licensing, which would seem to be more appropriate than the existing contradictory, product based regime.   

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.