Passage of FoFA welcome: ASFA

The peak body for superannuation today welcomed the passage through the Senate of the Future of Financial Advice (FoFA) legislation.

The Association of Superannuation Funds of Australia (ASFA) said FoFA is a good reform which will end the practice of conflicted remuneration and includes a statutory duty for advisers to act in the customer’s best interest.

“This will raise the standard of financial advice delivered,” said ASFA chief executive Pauline Vamos.

“It is a huge step forward in the professionalisation of the financial planning and advice industry.

“We believe the reforms will encourage greater trust in the industry and that will lead to more people seeking advice.

“As the superannuation system matures and the population ages, greater numbers of people will be looking for advice on how to make their money last, how to manage the risk of living a long time and how to manage their finances generally.”

The genesis of the reforms was the Ripoll inquiry into financial products and services in Australia. ASFA supported the 14 recommendations that came out of the inquiry including the introduction of the ‘best interest’ duty and addressing conflicted remuneration that could lead to biased advice.

“A core service of superannuation funds is the delivery of advice,” said Ms Vamos. “We are seeing more funds employ their own financial planners.

“We are also seeing stronger relationships between funds and financial planning groups.

“What FoFA does is align the ‘best interest’ motivation of superannuation with the best interest requirement in the delivery of financial advice.

“This has been a long time coming,” said Ms Vamos.

“There will no doubt be some challenges around implementation but it is important that the intention of the legislation is kept in focus; that is, delivering better results for more consumers.

“Today represents a big step forward towards that goal.”

For media inquiries, please contact:

Pauline Vamos, CEO, 0433 169 342

Rebecca Glenn, GM Marketing and Communications, 0416 170 439

Megan McDougall, Media and Communications Coordinator, (02) 8079 0849

About ASFA – the voice of super

The Association of Superannuation Funds of Australia is the peak industry body for superannuation and retirement policy and research. ASFA is the only organisation that represents all types of superannuation funds (retail, industry, corporate and public sector) and associated service providers. ASFA members manage or advise on the bulk of the $1.3 trillion in superannuation assets as at September 2011. Its members represent over 90 per cent of the approximately 12 million Australians with superannuation.