The Association of Financial Advisers (AFA) has continued to voice its opposition to the Government’s proposed “opt-in” reform, saying: “It looks like a policy dreamed up by the scriptwriters of Yes Minister.“
AFA CEO, Richard Klipin, cited recent Senate Estimate hearings, which suggested the reform will add around $100,000 to the running costs of an average advisory practice.
“A world in which unnecessary costs impede consumer access to advice is bad for consumers, bad for advisers and bad for the country,” said Mr Klipin.
Mr Klipin referred to questions asked by the Opposition spokesman on Financial Services, Senator Mathias Cormann, at a Senate Economics Committee hearing in late February.
In the hearing, Senator Cormann asked whether the committee had assessed the impact of opt-in on “the cost, availability and quality of advice”. In response, Treasury officials said that they had received reports “almost daily from various people who are doing studies in this area”.
Treasury officials summarised the responses, estimating that the opt-in reform would cost around $100 per person per client. “For an average size advisory firm, that might be around $100,000 a year,” one official said.
Mr Klipin argued that such a cost was prohibitive, and would “hurt the very people [the reform] is designed to protect”.
Opt-in is poor public policy with no discernable benefit
“Opt-in is poor public policy with no discernable benefit – not for consumers, not for the advisory profession and not for the broader community,” said Mr Klipin.
Why do we need an “Opt-in” policy when there is currently an “Opt-out” policy for clients to move away from an adviser at anytime, by signing a letter.
I agree with Brad’s comment, people do have the choice to move from one adviser to another if they are not satisfied with the advice, service or management of their financial affairs.
Why bother with opt in when the clients can opt out at any time? This is political ideology at it’s worst! I don’t have to opt in for my house insurance policy every year. When I mentioned this to the Treasury roadshow in Melbourne a few weeks ago the Treasury officials didn’t realise that consumers didn’t have to opt in every year on their general insurance policies. What planet do these people live on? Fancy these people dictating what will happen on the opt in issue. It’s outrageous!
Typical of how this country is being run, the mad men have absolutely no idea of how business works or how the industry operates. The majority of advisers jealously look after their clients interests, Govt are trying to legislate to keep the “few” whom do not give a damn in line.
Choice magazine who are pushing for ‘opt-in’ only have ‘opt-out’ with their annual subcriptions. Pot-kettle maybe…
onya Richard!!
Well spoken Klippo,
this opt in situation is a complete waste of time and resources, I’d be surprised if it didn’t add a lot more to the bottom line of a mature practice and it will see the people who really need advice unable to afford to have it provided. I’m not surprised at Treasury alleging they receive submissions daily about opt in, they just forgot to detail what the majority of those submissions say. At a meeting hosted by Treasury, in relation to the
Ripoll enquirry, they stated they had comprehensively interviewed advisers on its impact and had received significant acceptance of its recommendations. When pressed they admitted they had interviewed just 3 advisers, and I bet those 3 were tethered on leashes outside their door. 3 Advisers are not representative of an industry of thousands!
I rest my case
This “reform” seems likely to promote more losers that winners on both sides of the advice table. However, if we are serious about challenging this we need the strength of numbers to get in front of our federal members to make them aware of the problem . This is a call for action from all advisers . We cannot expect to just leave it to Richard and the AFA to fight our battles for us.
Has anybody asked the clients?
We (the industry and the government)continue to decide on what the clients need. Opt in is not giving them option as we all know a lot of clients are too busy to respond or do not take enough interest except when their adviser is in front of them.
Once again an ill informed non experienced public servant is deciding what the public wants with no real understanding of what is really needed. The implications on the public purse in the future is going to be enourmous if the opt in is adopted.
This is yet another idea that is being persued because some ego driven politician cannot admit their idea is without merit.
Service to the client has been lost in this entire smear campaign by the Industry Funds. What about the client in all this discussion, what about “know your client” & “in the best interests of your client”. Each and every client has the right to leave the adviser if they are not receiving service & advice that they are paying for. Why is this Opt In even on the table & is Opt in going to apply to industry funds, as I’m sure balanced to growth discussion entails knowing your client thus entails advice??? I also love it as an Industry Fund has Opt Out as their membership option, isn’t it the pot calling the kettle black. I wish this campaign got back to what is in the best interests of the client who requires our profession, not what is best for my fund.
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