Back in March I penned “FoFA has been hijacked“, and given what’s happened over the last few days, I just couldn’t sit on the sideline.
Why I hear you ask?
Because when Senators Lambie, Muir, Dastyari and Xenophon overturned the FoFA legislation that was working and provided certainty to investors and advisers, they handed a massive get out of jail free card to the major institutions. Let me explain why.
FoFA has handed the major players a massive get out of jail free card.
The FoFA reforms are very important, however they have transformed into a battle that is being waged by the industry superannuation funds and banks, driven by ideology and vested interests.
The debate should be about advice and how it can provide you with a better future. Sadly though, do you know what the debate is really about?
Your superannuation and where 9.5% of your salary goes each year.
Just quietly I feel so much better having said that.
All the talk is about flawed business models, corporate collapses and tragic stories of inappropriate advice. These stories are being used as a rationale to ensure that more of your superannuation stays with the industry superannuation funds and banks, under the guise that additional legislation, red tape and structural changes would have prevented the likes of Timbercorp, Westpoint or Trio from collapsing. No amount of legislation would have ensured that those businesses would (or should) have survived.
Please do not fall for the noise or the hysteria that certain sections of the media are putting out there.
Reform and action is vital, however almost all that we have seen is window dressing. These product providers, and yes that’s what industry superannuation funds and banks are, have zero interest in providing any semblance of what I call financial leadership. Financial leadership is what real financial planners do each and every day.
We provide direction and focus so you look past the headlines to put in place plans, strategies and behaviours that ensure you consistently;
- Spend less than you earn
- Put funds aside for holidays, fun stuff and tough times
- Invest in both shares and property for the long term (for me that means forever)
- Managing your borrowings wisely (and actually pay them off)
- Buy a home and at least one investment property
- Have some down side protection with insurances
- Are able to leave a legacy for your family or preferred causes
The very best planners actually encourage you to refine your strategy and do more of the above every time your salary goes up, but I haven’t heard any of this mentioned whenever FoFA comes up.
What I have heard relates very much to product and control.
If you want to know a little more about how things like Opt-In, Best Interests, Scaled Advice and General Advice then contact us.