LAW firm Slater & Gordon has expressed its support of draft legislation to provide greater safeguards for people using financial planners to invest in the stock market, property and other financial products.
The federal Government's draft Future of Financial Advice bill was released this week.
Since May this year Slater & Gordon has been providing clients with a no-win no-fee service to help recover losses due to bad financial advice, it said.
James Higgins, Slater & Gordon commercial and project litigation national practice group leader, said the proposed reforms were an important step forward following the high profile collapse of Storm, Trio, Westpoint and other financial service providers.
“Over recent years we have seen tens of thousands of Australians lose their life savings because of unscrupulous financial planners providing advice that was not in their clients interest,” Higgins said.
“We welcome these reforms because they will go some way to restoring the trust mum and dad investors have lost over the years in the financial advisory profession.”
Higgins said key elements of the reforms included financial advisers having to get their clients to opt-in every two years if they wish to continue to receive ongoing advice, as well as financial planners and advisers having to act in the best interest of their clients ahead of their own or their employer. It also includes increased powers for the ASIC to enforce the new elements of these reforms.
The firm launched what it calls the "recover service" in May in recognition of the fact that many Australians had received bad financial advice, but were concerned about “throwing good money after bad”, said Higgins.
The firm says the service fills a void in the current Australian legal market by giving mum and dad investors options, including not having to pay upfront the ongoing legal costs of often expensive litigation to pursue valid claims against negligent advisors.