Speaking to Investor Daily, IPA chief executive Andrew Conway said he was “very supportive of where the Coalition appears to be going” on the FOFA reforms and “happy to engage further in ensuring that we have a practical disclosure regime”.
A Coalition policy paper released this week committed the Coalition to completely removing opt-in, simplifying the fee disclosure requirements, “improving” the best interests duty, providing certainty around the provision of scaled advice, and refining the ban on commissions on risk insurance inside superannuation.
Mr Conway said industry needed “more useful disclosure that’s not in four-point font spanning over tens of pages” instead of the currently mandated requirements under FOFA.
In relation to the best interests duty, Mr Conway pointed out that the accounting profession already had a number of similar requirements in codes of conduct – as well as the ethical standards issued recently by the Accounting Professional and Ethical Standard Board (APESB)
The IPA is currently taking submissions from its members in relation to an alternative to the APES 230 ethical standards for accountants, which Mr Conway said have been “deemed to be unnecessary and weren’t adding anything substantial to the client experience”.
“We’re keen to ensure there is a degree of harmony across the board so there is a consistent definition and interpretation of the best interests duty," he said.
The Coalition policy statement cited research by the Insurance Council of Australia that found the implementation of FOFA would cost the industry $700 million to implement.
“The concern comes when the cost outweighs the benefit and when the cost becomes a barrier to people continuing to participate [in the industry],” said Mr Conway.
“If practices wear additional costs, those costs are invariably passed onto clients – and that makes it far more likely that people will just opt out of advice,” he added.
