Independent MP Rob Oakeshott has told riskinfo there are elements of the Government’s Future of Financial Advice (FoFA) reforms he does not support, particularly the proposed two-year opt-in arrangement.
In a statement issued to riskinfo, Mr Oakeshott said: “In regard to the opt-in process, I consider an on-going client relationship as somewhat of a rolling ‘opt-in/opt-out’ relationship anyway.
“A client is free to come and go in any service industry, including in the financial planning industry and I therefore struggle to understand why Government needs to make this administrative burden a two-yearly occurrence. Opt-in processes have a sense of the artificial about them, and in my view, good business practice thrives upon on-going client relationships anyhow.
Opt-in processes have a sense of the artificial about them
“In regard to other aspects of the FOFA package, I am working these through, but broadly am supportive of important reform in both the client and industry’s best long-term interests.”
Mr Oakeshott’s comments follow a statement he made to the Eureka Report where he said he would consider amending opt-in to extend to a period of at least five years, and that he was interested in whether the Coalition would extend this even further.
riskinfo contacted the other independent MPs to determine their position on the reforms. Federal Member for Kennedy, Bob Katter, said: “We are considering the implications of this particular legislation and are awaiting the debate in parliament.” Andrew Wilkie, MP for Denison, told riskinfo: ”These are complex reforms and I’m yet to decide my position.”
Tony Windsor and Tony Crook declined to comment.
Responding to Mr Oakeshott’s comments today, Shadow Minister for Financial Services and Superannuation Mathius Cormann, said he was pleased to see that the Minister for Lyne had recognised that the changes would hurt financial advisers and consumers.
“We hope that he will also see the merits of our policy argument that banning commissions on risk insurance inside superannuation would create inappropriate distortions in the market, reduce choice and increase costs for consumers.
“We look forward to working with Mr Oakeshott and the other Members of Parliament to ensure that Labor’s latest version of FoFA proposals are amended to avoid increased red tape and costs for both financial advisers and consumers,” Senator Cormann said.
Last week Senator Cormann said the Coalition would not support those FoFA reforms that it believed were not in consumers’ best interests, namely the opt-in arrangement and the banning of risk commissions inside superannuation.
AFA CEO Richard Klipin welcomed the comments made by Mr Oakeshott. He told riskinfo he believes the AFA’s message to Canberra is starting to have an impact.
But while Mr Klipin sees Mr Oakeshott’s statements as ‘… common sense’, he called on advisers to continue to send their message to their local Members of Parliament in order to reinforce the messages already being sent and received.
Mark Rantall, Financial Planning Association CEO, told riskinfo he was very pleased by the news.
“We’re delighted that Mr Oakeshott has taken that view. We’ve been speaking to him since late last year. We’re thrilled that he’s come out in support of not having a legislated opt-in arrangement,” said Mr Rantall.
“The two biggest issues with regards the proposed legislation are opt-in and the banning of risk commissions within superannuation, so we’ll certainly be appraising him of our position on that (commissions) and it would be good if he could come across on that issue as well.
“There is still a lot to be worked through in terms of the detail behind the FoFA pronouncements. We haven’t seen draft legislation so we’re encouraging members to continue to actively engage with their local MPs,” he added.
