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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

Survey finds FOFA reforms still problematic

17 December 2013
Jason Chesters

A global survey of more than six thousand international Chartered Financial Analyst charterholders, has found a dramatic increase in the number of respondents who identified ‘mis-selling’ by financial advisers to be the most serious ethical issue in the coming year.

The study of CFA Institute members has highlighted that the issue of mis-selling by Australian financial advisers has not been addressed by FOFA with half of respondents (48%) agreeing (an increase of 12% from last year’s figures.

Jason Chesters, the CFA Society Australian spokesperson has confirmed that the survey results show that CFAs are far from convinced that the FOFA reforms have yet to address the issue of mis-selling by financial advisers and said that, “it was exacerbated by indications that the new government will change ‘best interest’ provisions as part of the roll-back of FOFA.”

The CFA has acknowledged the government’s desire to cut red tape but encourage it to “implement policy that improves Australians’ access to high quality advice that is in their best interest”. Chesters has reiterated the pertinent message that: a strong foundation in ethical principles and standards is essential across the financial services industry to regain the trust of investors, but perhaps no more so than in the provision of advice.

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