The FPA has called on the federal government to reconsider its opt-in reform in light of recent market volatility and new comments by ASIC.
In a statement from association chief executive Mark Rantall, the FPA has urged the Minister for Financial Services, Bill Shorten, to reconsider its position on a two year opt-in proposed under the Future of Financial Advice reforms.
“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,” Rantall said.
“This week’s volatility is a perfect illustration of the dangers of opt-in.”
Rantall said claims by the corporate regulator that not having opt-in may mean consumers could pay for advice they do not receive due to asset based fees is “utter nonsense”.
“If the issue is either asset based fees or ongoing fees then let us have that debate. It has nothing to do with opt-in. You can still have an ongoing fee that is not asset based and provided it is not embedded in a product then the client has total control over whether or not they continue to pay that fee,” he said.
“While we accept the sentiment and strongly agree that it would never be conscionable to charge a consumer for a service they are not receiving, it is paternalistic to the extreme to use as an excuse that people don’t read their statements or paperwork as a reason to have opt-in.
“By all means give clients the opportunity to opt-out every year, but forcing clients to have to opt-in is an added burden they shouldn’t have to bear.”
The FPA’s renewed calls on the government to rethink opt-in comes a week after Shorten indicated it would rethink its decision to ban commissions on insurance inside of superannuation.
