Sent: 03-05-2011 11:38:06
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FoFA Mark II
You would have to be hiding under a rock not to know that the Government has released another discussion document on its Future of Financial Advice reforms.
Even the mainstream media have been onto the story in a fairly big way.
There's much talk that every financial services provider and supplier is a winner and a loser which supposedly makes it harder for people to complain about their losses.
It's not appropriate to be for or against these proposed changes until we see some actual legislation. But by the time these laws are passed the expert commentators will have moved along to more immediate matters.
Having said all that here are some thoughts about FoFA Mark II.
Is it logical that asset fees on margin lending products and commission on superannuation life insurance contracts are bad but such fees and charges are okay via any other structure?
Is it logical that life insurance commissions in super reduce a retirement benefit but asset fees are okay because a margin loan is not involved?
Is it logical that if a client elects not to renew an advisers services at the end of a two year period, product providers will not have to reduce product fees?
What value is the opt-in unless fees are reduced for not receiving advice?
Nothing substantial in financial advice will change until:
- Product providers and financial advisers have to disclose percentage fees, and the impact of these fees, in dollar terms over the short and medium long-term for all products
- Product providers have to reduce their costs when a financial adviser is was never involved, or no longer involved, in the provision of a product
I have long thought that financial advice is essential. The tax, social security, aged care, superannuation, life insurance, other product, financial market and other considerations are so complicated that it's impossible for any human being to work out what is best for them because of this absurdly complex mélange.
It needs to be acknowledged that this complexity exists primarily because of Commonwealth Government legislation and regulation. The politicans are never brought to account for this pathetic outcome from their activities and oversight of Government department activities.
Finally please consider purchasing a copy of "A How To Book Of Self Managed Super Funds". You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
The 4th edition was released just before Christmas 2010
For details of the changes made from version 3 to version 4 visit: http://www.atcbiz.com.au/r.php?r=8mz1024
As you'll see from the list there have been many changes.
Two purchase options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.