The annual renewal requirement in the Hayne Royal Commission Response No. 2 Bill will add more costs to financial advice and will impact access to advice for everyday Australians, according to the Association of Financial Advisers (AFA).
The annual renewal would be required from clients for all ongoing fee arrangements which the AFA said was not necessary in a statement.
“The legislation is another Royal Commission-related bill that has been pushed through the Parliament with undue haste and lack of due process. We have repeatedly seen these bills submitted and passed without a Regulation Impact Statement or any form of Parliamentary Inquiry and inadequate debate of the substance of the bill,” the statement said.
“The inevitable result of this is an increasing number of unintended consequences which will have negative implications for financial advice practices and flow on effects in terms of extra cost and complexity for clients. These issues will need to be fixed down the track.”
While the AFA was “pleased” the Government had made significant improvements to the final Hayne Royal Commission Response No. 2 Bill, it said it was disappointment it had failed to take onboard its feedback.
The Government would need to work out how to fix the important issue with timing differences with fee disclosure statements (FDSs), that had led to ASIC recommending that advisers manually check product systems to confirm that FDSs were correct. The failure to address this as part of this reform, when the Government was simultaneously talking about red tape reduction, was disappointing.
“The bill is due to start from 1 July, 2021, which is now only four months away. While there is a 12-month transition period, there is a lot of complexity in the transition arrangements and much to be done in this short time,” the AFA said.
“Product providers will need to ensure that system solutions are available for the efficient capture of client consent forms.”
Comments
Canberra Pollies, ASIC & Treasury keep saying they want to make Advice more affordable.
Somehow to them that means ever increasing BS REGS and Red Tape Costly Admin to keep piling onto the already most overly regulated industry in the country.
Disgusted in LNP, Frydenburg, ODwyer, etc these clowns of a so called Liberal party have done nothing but Kill Financial Adviser for the last 8 years.
Time to get rid of Frydenburg, he must go. And the LNP too. Labor Party can't be any worse even if they try to be.
STRANGULATION BY EVER INCREASING BS REGULATION !!!!!!!!!!!!!!!!!!!!!
Disgusted.
I have always voted Liberal, won't be at the next election. I cannot understand how they can increase the burden of complexity on Advisers and their clients (as they need to try and understand why they have to sign so many forms) and not level the playing field with the intra fund advice as their hidden fees are carved out. Seriously, Fin Services in Australia is so f*%ked up right now. Well done to everyone involved in making this sh!t show just that little bit worse. The upside is I'll have less clients by July as many of them won't be able to pay the increased fees, the downside is I'll have less staff too as I won't be able to afford them. Good times!
Exactly, what a farcical ambition it was to make Australia a financial capital of South East Asia. In an environment where HK is being strangled by the CCP and Singapore is a laundry and we can't capitalise on that? What a joke this LNP is. At least with the ALP we know where they lie. The whole industry is f*%ked and being handed to overseas interests. The stripping of Australia continues. Don't vote for the majors, don't bank with the majors. Back decentralised finance and private crypto.
so who would you vote for? Labor would be ten times worse and the independents or minors can't form government. Not sure I comprehend what you are aiming to achieve.
Actually, the Haynes No 2 bill clearly spelled out the regulatory impact on Page 4 of the bill's Explanatory Memorandum, which says consumers are now going to be hit with increased unnecessary admin costs of over $30 million pa forever. And both Liberal & Labor in the Senate BOTH voted to increase those costs on consumers.
However the bosses at Westpac Group Employer Super are clapping their hands in glee. They got exactly what they wanted from Frydenberg's Chief of Staff, who is a former Westpac person. More tied agents (with intrafund firmly entrenched in this bill) & the advisers being forced to work for slave wages - not even making enough to hire support staff. But the phone call centre staff & intrafund tied agency reps have never had it so good, with no such requirement for informed consent or annual Opt-Ins to get paid.
Make no mistake, the Fed Liberals are all about destroying small business & empowering big business. Both Liberal & Labor are both pandering to the top end of town (with no such red tape on millionaire investors), while both are dangerous for low income families who desperately need advice. Wakey wakey. Don't let them get away with it, as they scurry off into the dark, like rats up a drain pipe.
A little humor out of this almighty F##k up.
Here is an example of how fund managers won't interfere..
I am an adviser and i have my super with Colonial First State.
I get a letter addressed to me as the client saying i must update my email and phone number as it is the same as the adviser and this is not allowed.
I emailed back advising that, in fact, i am both adviser and client and these were the correct contact details.
I received another email asking me sign a "Adviser accounts declaration form"
Extract"" Adviser contact details cannot be used in the client contact fields of a super, pension or
investment account unless it’s your own account.....I declare that I am the account holder or owner for all of the accounts and OIN’s listed above.""
So ladies and gentlemen i can't wait to see what they contact clients about in relation to advice fees and what the advice was about.
Welcome to the new world.
If you can't laugh you would cry.
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