The ABC’s Fact Check program has investigated the Opposition’s claims that the amendments to the Future of Financial Advice (FoFA) legislation will lead to another Westpoint-style collapse.
Fact Check, which purports to determine the accuracy of claims by politicians, public figures, advocacy groups and institutions engaged in the public debate, looked into the Government’s proposed FoFA legislation changes. In particular, the program tested comments made by Shadow Treasurer, Chris Bowen, in Parliament earlier this year, in which he insinuated the reforms would reinstate the type of commission payments that led to the Westpoint collapse.
“The commissions being paid for the advice to invest in Westpoint amounted, on average, to 10% of the amount invested,” Mr Bowen told Parliament. “And this Government thinks that’s just fine. This Government wants to bring back laws which would enable that to happen…”
According to Fact Check host John Barron, Mr Bowen is ‘scaremongering’ when it comes to FoFA.
“The changes won’t be bringing back the types of commissions that caused people to lose millions from companies like Westpoint. As soon as an adviser knows a person’s financial situation, they’re no longer eligible for a commission,” Mr Barron said.
Comments from the general public in response to the article were mixed, but a large number still expressed concerns that the FoFA reforms were being ‘watered down’ and that they should be left intact.
The Fact Check article follows comments from Mr Bowen which allege that financial consumers have been further disadvantaged by the reduction in funding for the Australian Securities and Investments Commission, announced as part of the Federal Budget (see: Treasurer Cuts ASIC Funding).
“At a time when you are cutting funding to the corporate regulator, going through with plans to weaken consumer protections will put Australian investors at risk,” Mr Bowen said.
“If the Government wants to make technical changes that don’t dismantle the key features of FoFA, the acting Assistant Treasurer should immediately enter into dialogue with Labor to work constructively through the existing Senate legislation inquiry into the Sinodinos reforms.”
The FoFA amendments legislation is currently the subject of a Senate Economics Committee inquiry. The Committee is due to hand down its report on the reforms on 16 June 2014.
Chris Bowen has not been efficient at any portfolio he has had so why would he need to be listened to?
Chris Bowen and the Labor opposition have no credibility whatsoever to even make comment on the FOFA issue, let alone have the misguided notion that the government should enter into dialogue with Labor to “work constructively”.
When in government, Labor cost every Australian significantly more than any investor has ever lost due to poor advice, fraudulent acts, substandard financial product or sheer greed.
The reason why the comments from the general public were mixed, is simply because the general public are mixed up about what constitutes advice and what doesn’t,what independent advice is or is not,the real value of advice and the payment options for receiving advice.
A large part of this problem is the consistent push by people like Chris Bowen to create and promote an environment of fear that when repetitively pushed through the media, results in the public becoming apprehensive toward seeking advice.
Financial Planners and Advisers around the country well know that the relationships with their clients is first and foremost built on trust and the knowledge their client understands the commitment for that advice to be in theirs, their family’s or their businesses best interest,
something that the Labor party totally ignored when in office due to infighting and a lack of trust even among themselves.
They made a complete mess of the initial FOFA arrangements and now it is time they let others clean up their mess so we can eliminate the confusion and provide the public with clarity and confidence.
dreamers.
Bowen is exactly correct in this and fact check has been proven wrong on this occasion.
They didnt have the necessary info to make this verdict.
I want to know where is the fact check on the governments claim this will ruin small businesses?
We all know this mainly effects the big 4 banks and AMP.
They are the majority players in the industry, not small business.
This is typical of conservatives, as usual in big businesses pocket only
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