Are you more concerned with the nature of the proposed FoFA reforms or with the timing of their implementation?
- Equally concerned with content and timing (60%)
- Mostly concerned with the content (32%)
- Mostly concerned with the timing (4%)
- Generally ok with both content and timing (3%)
- Still not sure (2%)
As the Future of Financial Advice (FoFA) debate heats up with the PJC hearings in Sydney this week , we want to know where you stand today. Our latest poll question asks:
Are you more concerned with the nature of the proposed FoFA reforms or with the timing of their implementation?
Over the last year, many advisers have told riskinfo they have no significant issues with any of the proposed FoFA reforms, while an equal number have said they have very deep concerns about the impact on their practice of areas such as the opt-in process and the potential cost of annual fee disclosure.
Where do you stand? As the FoFA deadlines draw closer, accompanied by strong lobbying for implementation delays, are you generally ok with the reforms themselves, but have concerns about being ready in time? Are you ok with both content and timing? Or do you continue to oppose some of the proposed measures for the detrimental impact you believe they may have on your ability to deliver quality advice to your clients? What is keeping you awake at night?
Tell us what you think…
Add your comment now
9 Comments
FoFA is ill considered and justy a major Industry Fund - Bank Con Job. Lets be honest the only winners will be the industry funds and the banks. The losers will be the IFA’s and all clients who need non-aligned advise
Senator Mathias Corman the Liberal Senator from WA and shadow minister for Financial Services is doing a brillant job at the PJC on FOFA. It appears ASFA, ISF, Choice, Treasury Boffins and the Union controlled Gillard/Shorten Government want to wipe away Financial Planners working in the SME space. They want to control us make us employees of Banks and Union run Industry funds and then force us to beoome members of their beloved Unions. People may laugh at me with these comments. But 5 years ago when I said to them if Labor gets into government they would ban commissions. People in Australia need to understand about the Labor party that they are incremently advancing their century old aims central government control over our lives.
The timing of bad regulations, either brings forward or delays bad results.
More important is how these regulations, if forced upon everyone, will be implemented.
The ripple effect of illconceived, untested and unnecessary road blocks to giving advise, will not be felt in the epicentre (Canberra) but in the rest of Australia which will bear the burden.
If it gets too hard and not enough income can be earned to comply with more red tape and unworkable regulations, then people will no longer be able to give advise around Insurance and will leave the Industry.
Consider how many people are employed in the Life Insurance Industry and the implications of thousands of newly unemployed people for little or no gain to the very people we represent,OUR CLIENTS.
Everyone who wants to stay in the industry long term wants some of the FOFA rules in order to get rid of the bad eggs. But should the opt-in rules and annual disclosure rules go ahead, there will be no way anyone (banks included) can give quality advice, as opposed to product sell, to smaller clients who do not have the means to pay for the increased cost of red tape. Why would anyone bother to send opt in letters and annual statements, follow up clients etc? It is so clear that provision of real advice will reduce not increase - cannot understand who these people are who are not able to see the very obvious. In any case the new rules should only apply going forward so that we can decide who we can afford to take on as new clients.
like a sick old ladywho has just had enough and wants to roll over and die, so advisers have had enough of FOFA. They would rather get it over with and del with the outcomes. The minister agenda is driven by ideology and need to repy union mates. Commission on group insurance outside super but not inside will deny millions of members access to core super benefits and will cause thousands of sub standard lives to be uninsured. We need to fight on. That is what we do. Do not give up. Keep harrassing your local member and make submissions. Show you care.
Has any body heard from Rob Oakshot?
Financial advisers operate many different business models. Those who concentrate on providing a very high level of service to a small number of high net worth and/or high income clients will have no problems with Opt-in or an extra fee notice. However those advisers who have chosen to provide advice at a lower level to large numbers of low net worth clients will find the new rules a very major problem. Getting all clients to sign and return Opt-in forms will be impossible and the more we harp on about how much fees they are paying the more likely they are to find reasons not to return the forms. I find it disappointing that the HNW advisers who won’t be affected seem unable to understand that there are other business models and many advisers who operate them will be greatly affected.
The winners our of FOFA will be the Industry Funds and Banks who treat our clients as if they are mere commodities - just profit centers to categorize and deal with according to their ability to generate income for the institution TODAY rather than develop for the long term. FOFA will change our industry at its very foundations and I am not sure the result will be good for our clients. I know it is going to be tough on us.
Proper design of client portfolios is based on longer term strategies than one or two years. Accordingly the Planner takes responsibility for the future performnce of the strategy, the funds used, and the need to change these as circunstances of the economy or the client change. Portfolios cannot be set and forgotten if there is real concern for the client. When a client decides to opt-out by not opting in or by simply sacking a Planner, then the client is jeopardising his future welfare, until such time as a new Planner is engaged. Meanwhile, if the client does not change the previous Planner’s strategy as the client’s circumstances change, the economy changes or the funds manager has a nervous breakdown, and the client’s portfolio suddenly nosedives, then there is a risk that the client will attempt to seek redress from the discarded Planner. Planners in future should ensure that they have the right to convert a client’s investments to CASH when the client chooses to sack them so that the Planner can no longer be held responsible for the ongoing investment portfolio with all its risks.
The other problem at present is the lack of transparency of the payment of FEES to BERNIE FRASER, Mr O’RIORDAN, the famous Pauline Vamos, and the multitude of others associated with “Industry” funds. There is no compulsion for them to declare their individual hard and soft rewards!