The Financial Planning Association has come out in support of the Senate Economics References Committee's recommendations for stronger ASIC penalties and redefining the term "general advice".
FPA chief executive Dante De Gori said that the FPA "recognises that thousands of Australian investors suffered when the agribusiness investment schemes collapsed.
"Unfortunately, many investors did not fully understand what they were buying, and believed that they had been recommended an investment which took into account their personal circumstances, when this wasn't in fact the case."
De Gori noted that agribusiness managed investment schemes, the likes of which led to the 2009 crisis, are so complex that "many" FPA members avoid them due to a lack of understanding. "Licensees do not include them on their approved product lists. That's why the distinction between product sales and financial advice must be made clear," he added.
He explained that the committee's report is part of a broader reform agenda for financial services, and argued that more needed to be done.
"The FOFA reforms are a positive step, but the fact is that many of the product failures and consumer losses associated with agribusiness MIS are the consequence of inadequate leadership in responding to the financialisation of Australian society," he concluded.
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