The Association of Financial Advisers (AFA) and the Financial Planning Association (FPA) have both stepped up their fight against opt-in, using the current market volatility to illustrate the potential unintended consequences of the policy.
In separate statements, the Associations have called on the Government to scrap the two-year client opt-in policy, saying it will not benefit consumers.
The AFA’s CEO, Richard Klipin, said global market jitters serve to illustrate why opt-in is poor policy and a disaster for consumers.
“In a world where opt-in exists, consumers will be left out in the cold at times like these. They will be calling 1300 call centres, answered by inexperienced call centre operators who have not had the training, experience or education to cope with market crises or the ability to offer advice on complicated matters,” Mr Klipin said.
“When you have a health crisis you want a specialist who has seen problems like yours many times before; a specialist who has had many success stories; someone who gives you the best chance of recovering well,” he added. “The same is true when you face a financial crisis – you want a professional, experienced financial adviser; someone with the experience and knowledge to guide you through, so that you come out of it as well as possible.”
FPA CEO, Mark Rantall, expressed similar views, saying: “It is the ongoing relationship between financial planners and their clients that enable planners to immediately act, provide advice and reassure clients to enable them to make rational decisions,” Mr Rantall said.
“The proposed opt-in requirement could put at risk planners ability to provide a critical response during crisis situations and market uncertainty such as all Australians are faced with now.
“This week’s volatility is a perfect illustration of the dangers of opt-in,” he added.
This renewed call on the Government to reconsider a key plank of its Future of Financial Advice reform proposals follows comments made at the recent FSC Annual Conference by the Minister for Financial Services and Superannuation, Bill Shorten, indicating he was reconsidering the ban on commissions for individual risk insurance advice for policies held within superannuation.
