The Financial Planning Association (FPA) has described recent comments from sections of the trade union superannuation movement advocating an opt-in payment structure for financial advice as ‘alarmist’.
Opt-in would result in many Australians being locked out from accessing quality financial advice and would result in poor savings and retirement outcomes for many Australians, the FPA stated.
“The opt-in proposal is bad public policy that will harm more Australians than it will benefit,” said FPA chief executive Mark Rantall (pictured).
Opt-in would introduce administrative complexity, confusion and increased compliance costs, he said.
The FPA has embraced transparent guidelines banning upfront and trailing commission payments, which effectively renders opt-in redundant. The FPA stated that proponents of opt-in were running a myopic campaign that could endanger the financial futures of many Australians.
“The FPA is tired of the industry fund one-track agenda, and with the removal of commission-based payments can see no logical reason for continuing this time-consuming debate,” the FPA statement said.
The comments follow recent research commissioned by the Industry Super Network (ISN) and conducted by Rice Warner that found the cost of implementing opt-in for the industry would be negligible, and would “ensure adviser remuneration is aligned with personal exertion like other professions”.
A recent Money Management survey found that many planners thought opt-in would add more than 10 per cent to their costs and that they would be passing on that cost to their clients.
