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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

AFA labels FOFA’s best interests duty removal a fallacy

14 January 2014

The AFA has said that claims the Government’s announced FOFA amendments will reverse the fiduciary duty for financial advisers are absolute rubbish.

With debate regarding the Government’s recently proposed changes to FOFA currently a controversial and topical subject Brad Fox, Association of Financial Advisers chief executive has weighed into the discussion by claiming that, “the mainstream media and other stakeholders have been peddling misrepresentations of the truth. Fox said that, “the mainstream media’s reporting that the amendments will strip out the best interests duty is the biggest fallacy and misrepresentation of the truth around.”

In Fox’s opinion, the changes create a best interests duty that will work in practice and work for clients as well as make sure advisers know the boundaries better rather than get rid of the best interests duty and attacked the claim as, “an example of the absolute rubbish being written by well-known reporters and media outlets.”

Fox has called on advisers to “ignore the static” and issue personal communications to clients refuting the claims.

Fox has also been damming of Shadow Treasurer Chris Bowen’s Twitter claim that the proposed amendments will make “another Storm, Westpoint or Trio collapse more likely”, claiming that, “it is politically convenient to say that the amendments will create another Trio, but it’s simply untrue” and conceded that “product failure” is the true reason for the fund manager’s collapse, and that the Murray inquiry, not FOFA, is the appropriate vehicle for dealing with that issue.”

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