Removing Best Interests Protections from Financial Advice Laws Will Hurt Australian Workers
The Federal Government’s removal of the best interests test from financial advice laws will place working people at risk of receiving conflicted financial advice and having their super eroded.
In more bad news released five days before Christmas, the Abbott Government has announced it will reverse almost all of the reforms to financial advice laws—laws that banned ongoing commissions and conflicted advice.
Construction Forestry Mining and Energy Union (CFMEU) National Secretary Michael O’Connor said today that the Government’s announcement was a capitulation to the very worst elements of the financial advice industry.
“In public policy terms this announcement is a national disgrace.”
“These changes will expose working people to conflicted advice. An adviser or planner will be free to recommend products they receive a commission for and the customer has no way of knowing.”
“The reforms to financial advice of last year brought integrity and basic consumer protections back to an industry that was living in the past. In what other industry are hidden, ongoing commissions allowed?”
“Removal of the best interests protection means that clients of financial advisers will have no way of knowing that the advice they are receiving is actually right for them; or if it’s just been recommended because their adviser will receive a kickback.”
“Commissions erode people’s super without them even knowing it, and can result in tens of thousands of dollars less in people’s retirement balances.”
“The Government has caved-in to pressure from vested interests. They know this is bad news for Australian workers, which is why they are announcing it on a Friday—five days before Christmas.”
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