Only 10% of 156 senior indemnity directors, insurers, brokers and advisers believe FOFA will be successful in removing rogue traders and advisers from the industry and is more likely to raise costs for all advisers.
The surveyed results were highlighted by National law firmat the Australian Professional Indemnity Group annual conference in Sydney recently and 22.73 per cent of those surveyed believe FOFA will lead to better practices and result in fewer professional indemnity insurance claims but only 9.09 per cent consider that the reforms will help ASIC weed out rogue traders.
Moray & Agnew partner Geoff Connellan has said that, “If the objective of the reforms was to provide further protection for consumers, the industry is dubious that outcome will be achieved.”
Adding to the discontent expressed, 12.88 per cent indicated they believe the new regulatory environment will squeeze small and independent operators out of the market, and 18.94 per cent expect the cost of financial advice to increase under FOFA. Connellan has reiterated the sentiment by stating that “FOFA would push up the cost of financial advice” and “the results were not surprising.”