Aussies hit with $7.5 billion in extra costs due to FOFA changes

Changes to the Future of Financial Advice laws could cost consumers more than $530 million a year in increased fees and charges, according to a report published today.

The report from Rice Warner says the reintroduction of commissions and other conflicted payments could hit consumers with a staggering $7.5 billion of extra costs over 14 years.

It also debunks the claims by banks and financial planners that diluting consumer protections will reduce the cost of advice.

Industry Super Australia chief executive David Whiteley said in a statement the multi-billion dollar impact explains the relentless lobbying by the banks and financial planners to reduce consumer protections.

“The reality is that cutting consumer protections just increases commissions and fees paid to financial planners to sell bank products.”

“It would seem that the banks’ objective is to be able to sell compulsory super and other products through financial planners and other staff, rather than provide Australians with the impartial financial advice that they want, need and deserve,” he said.

This article first appeared on SmartCompany.