Opt-in Won’t Impose Heavy Cost Burden – Shorten

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To what extent will a two-year client opt-in process impose a financial burden on your advice practice?
  • Significant extra cost to business (86%)
  • Minor additional business cost (10%)
  • No additional business cost (5%)
  • Not sure (0%)

Financial Services Minister Bill Shorten has told advisers this week he is not convinced that a client opt-in process every two years will have a significant impact on the cost of running an advice business.

We would like your opinion on this issue, where we are asking:

To what extent will a two-year client opt-in process impose a financial burden on your advice practice?

A recent riskinfo poll addressed the question of whether opt-in measures themselves would reduce the cost of advice to consumers, but this poll addresses the cost of opt-in to the practice.

In speaking to advisers at an AFA function this week, Mr Shorten said that in all the discussions he has had with industry representative groups and individual advisers he has not been swayed by their argument that the administrative and associated financial costs of implementing and maintaining a two-year opt-in process will severely impact the profitability of advice businesses.  He said he has listened to concerns that have been raised and has compromised by extending the opt-in requirement out from one to two years.

Mr Shorten said he is taking a pragmatic approach to opt-in and is “… keen to continue a close dialogue with industry to ensure that to the greatest extent possible, opt-in can fit in with the existing advice process and that the compliance regime is not heavy-handed.”

He also told media that some advisers had approached him after his speech, telling him they could ‘live’ witha two-year opt-in process.

Is this the case with your own practice?  Do you accept Minister Shorten’s contention that opt-in requirements will pose no serious threat to business profitability? Or do you hold that opt-in measures will indeed be found to have a significant cost impact on your bottom line?

Mr Shorten has indicated he continues to listen to the industry and we encourage you to offer your constructive comments on this issue, where it is not too late for your voice to be heard…



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10 COMMENTS

  1. It is hard enough getting paperwork back from clients without having to chase them re a opt-in form as well……

  2. Individual opt-in to grouped arrangements will add significantly to the cost of administering those arrangements, or probably more likely, destroy those arrangements all-together. These are grouped insurance contracts and grouped corporate superannuation arrangements. The fact that Bill Shorten decsribes that he doesn’t see this outcome demonstrates either that he doesn’t understand the value that results to clients withing these arrangements OR that he does but is subject to the vested interests of the industry fund lobby.

  3. Well done AFA!Where the hell is the FPA!
    I am just about to pay $1017 FPA membership renewal,purely to keep my CFP,and am wondering for how much longer.

  5. As Helen says, it is hard enough to get clients to return sined documents and paperwork filled in. They do not see it as being important to them, plus they do not want to have to “think” about some of the questions that we require to be answered in order to provide advice.

    As for opt-in, why? The clients can already opt-out of advice by writing to the product provider cancelling the advisers fees & trails. Opt-in is going to create a lot morwe work, particularly for advisers in regional areas.

    Once again Shorten proves that he knows nothing about how advisers run their advice business and that his agenda is to have the unions and industry funds run financial planning in this country.

  6. What idiodic advisers said that they can “live” with a 2 year opt in !!?? Bank or Industry Fund employees… no idea ! Keep up the lobbying an election isn’t to far away

  7. If Bill Shorten thinks Opt In is workable why does he not champion non compulsory voting? Why were the Labor party and unions opposed to compulsory unionism? Why was voting by secret ballot brought into union meetings on strikes etc? why was the stick used to force people into basic hospital cover (with the threat of higher Medicare levies) Blind Freddie and his dog can see that “Opt In” is a thinly veiled attempt to further erode the position of financial advisers who have(in spite of the dodgy operators) done a damn fine job over the years. No this is about his need to help his union mates take control of the hearts and minds of the Australian work force.
    Q: When is an opt in solution a good solution? A: When it doesn’t undermine the Australian labor party

    And Just for the record, I reckon we should be allowed to “Opt in” on carbon tax as well…………like that will ever happen.
    this government has done more to destroy the confidence the Australian people have in their elected representatives than any i can ever recall. Promises are not worth the air time we give them. In fact an election Promise is Political speak for Look at me I am telling you lies.

  8. Thanks Graham, You are on the mark. Shorten should backup his requirements for advisers by placing himself in the same position as he is demanding of us. He should agree to remove himself on an annual opt in basis as decided by the voters. If 1 year is good enough for us then so be it for him and his comrades.

  9. My concern is what the client will do when they opt out on advise from the budgie, and when they opt in again who is going to clean up the mess and is the adviser liable.

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