{"id":10748,"date":"2011-05-30T17:46:47","date_gmt":"2011-05-30T07:46:47","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=10748"},"modified":"2021-04-15T10:16:16","modified_gmt":"2021-04-15T00:16:16","slug":"isn-claims-opt-in-cheaper-for-consumers","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2011\/05\/30\/isn-claims-opt-in-cheaper-for-consumers\/","title":{"rendered":"Opt-in Will be Cheaper for Consumers – Claim"},"content":{"rendered":"

The Industry Super Network (ISN) has released research which it says proves that the proposed opt-in reforms will reduce advice fees for consumers.<\/p>\n

The study, conducted by actuarial firm, Rice Warner, modelled five common simple advice scenarios and found that in every case the consumer was better off using Industry Funds Financial Planning (IFFP) than paying an adviser ongoing asset based fees.<\/p>\n

According to Rice Warner, the findings demonstrated that where consumers paid for advice on an upfront basis (the IFFP model), the cost was between two and seventeen times cheaper.<\/p>\n

One off and transparent charging for financial advice will reduce costs to consumers<\/h6>\n

ISN Chief Executive, David Whitely<\/strong>, said the study systematically debunked the myth that the Future of Financial Advice (FoFA) reforms would increase the cost of financial advice to consumers.<\/p>\n

“The report demonstrates ongoing fees are typically the most expensive way to pay for financial advice. \u00a0The report shows that, as proposed in the Government’s FoFA reforms, one off and transparent charging for financial advice will reduce costs to consumers.\u00a0 This will consequently increase the capacity for ordinary Australians to access financial advice, whether from financial planners, accountants or super funds,” he said.<\/p>\n

The ISN argued that the study reinforces the importance of the Government’s opt-in proposals to protect consumers paying fees to financial planners for advice they do not receive.<\/p>\n

“Ongoing fees are a very expensive way to pay for financial advice and this is shutting out the four out of five consumers who do not seek professional advice,” Mr Whitely said. \u00a0“The Government’s reforms will ensure advice fees are transparent.\u00a0 The opt-in measure will ensure that consumers are not paying for advice that they do not receive and this will make advice a lot more affordable and accessible for ordinary Australians.”<\/p>\n

In its report, Rice Warner explained that the recommendations made for each scenario were based on the assumption that the clients were already members of an Industry Super Fund, and that these members only wanted advice related to aspects of their superannuation arrangements. \u00a0The modelling assumed that none of the clients required a regular ongoing review of their strategy.<\/p>\n

The report also noted that the fees provided by IFFP for use in the updated study were different from those supplied for the original modelling (conducted in late 2008).<\/p>\n

The new fees used were:<\/p>\n