As many as 35,000 people in the financial advice industry will lose their jobs if the proposed Future of Financial Advice (FOFA) reforms go ahead without amendment, according to the Association of Financial Advisers (AFA) chief Richard Klipin.
Klipin referred to the explanatory memorandum attached to tranche 1 of the FOFA package, which predicted around 6,800 financial advice roles would be wiped out.
"Extrapolate that number out to include the five or six ancillary staff each small business adviser currently employs and you're looking at about 35,000 jobs," Klipin said.
The AFA is in a good position to estimate potential job losses because it mostly represents small business financial advisers, he added.
On the other hand the AFA remained optimistic that, following the Parliamentary Joint Committee hearing, there would be a common view on the elements of FOFA "that help achieve the Government's objectives and those that do not".
"The AFA commends the rigour and transparency of the process and thanks the PJC for the opportunity to shine the light on the real facts and impacts of FOFA," Klipin said.
The introduction of the best interests duty and the removal of conflicted remuneration make sense, but Klipin believes measures such as opt-in, annual fee disclosure and "the introduction of legislation which favours scaled and intra-fund advice over holistic planning will ultimately price ordinary consumers out of advice."
