The SMSF Professionals’ Association of Australia has supported the federal government’s decision to modify best interest duty as part of the FOFA reforms.
SPAA chief executive Andrea Slattery said the association does not agree with the criticism that changes to the best interest duty have “inherently weakened” how it works.
“We support the amendments because the existing legislation had the potential to be too broad in application, to create uncertainty and to cause a high compliance burden for financial advisers,” she said.
“Removing the [best interest duty] catch-all provision will increase certainty and reduce costs for advisers, with these benefits flowing on to consumers of financial advice.”
Ms Slattery added that while SPAA welcomes changes, the government’s amendments allowing an exemption for general advice from the ban on conflicted remuneration remain “too generous”.
“SPAA understands a key motivation of the government’s amendments to remuneration of general advice was to increase access to general advice by lowering the cost.
“However, improved availability [of] general advice does not equate to consumers receiving financial advice that is appropriate, adequate or will assist them in making improved financial decisions,” she said.
“The best approach is an environment where an adviser’s remuneration is aligned with providing high-quality advice without the influence of commissions.”
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