As the industry continues to debate the merits of opt-in, the Opposition has confirmed it would rescind the policy if it were to regain power in the next election.
Speaking at the Financial Planning Association (FPA) National Conference last week, Senator Mathias Cormann said: “If we come into Government we will be overturning it. There’s absolutely no ‘ifs’ or ‘buts’ about it because we think it is bad policy.”
We have wasted the last two years
“Bernie Ripoll’s inquiry never recommended that there should be some attempt by Government to force people to re-sign contracts with their advisers on a regular basis,” he said.
“We have wasted the last two years… Why don’t we get on with the reforms where there is broad support and that are actually going to make a difference, rather than to come up with things that are going to make things more complex, less affordable and which make us the world champions of red tape?”
Senator Cormann’s comments were made during a heated industry panel discussion, which included FPA CEO, Mark Rantall, MP Bernie Ripoll, and Industry Super Network (ISN) CEO, David Whitely.
Introducing the session, facilitator Tony Jones said the panel would cover a wide range of industry issues, but the panellists found themselves continually returning to the debate over opt-in.
Arguments were made for and against the policy which much discussion focused around the intent of the opt-in provision.
Mr Whitely argued that the purpose of opt-in was to take action on ASIC’s recommendation to the Ripoll Inquiry to remove asset-based fees from the industry.
“If you don’t like opt-in, the much easier solution to this is to support a proposal that bans asset based fees,” he said.
What a tragedy that we can’t all get together as Australians and provide a better deal for consumers
Mr Ripoll said a requirement to communicate regularly with clients was not an administrative burden but a way to improve disclosure.
“Opt-out sounds great, but the reality is we know for a fact that people can’t opt-out, they don’t know how to opt-out, some of them don’t even know they’re in,” Mr Ripoll said.
“In terms of red tape I’d actually say there’s no more red tape than you do today. Who here doesn’t communicate at least once every 24 months with their clients?”
Speaking on behalf of his Association’s members, Mr Rantall said he was disappointed that the FoFA consultation had devolved into a debate over one area of reform, being opt-in, and accused the ISN of side-tracking the Treasury on this issue.
“What a tragedy that we can’t all get together as Australians and provide a better deal for consumers, because I know everyone in the audience would support that view wholeheartedly,” he said.
