ASFA submission supports difficulty of opt-in
At the same time as sections of the financial planning industry fight have proposed opt-in arrangements flowing from the Future of Financial Advice (FOFA) changes, the Federal Treasury has been warned by a peak superannuation fund body about how difficult it can be to engage with members.
The Association of Superannuation Funds of Australia (ASFA) has used a submission to the Treasury to urge the Federal Government to consider making superannuation fund members specifically opt-out of the consolidation processes, which will inevitably accompany the use of tax file numbers (TFNs) as primary identifiers within superannuation funds.
ASFA argued that it had been the experience in the superannuation fund industry that members do not always appropriately respond to correspondence — something that would make opt-in consolidation arrangements problematic.
“Funds’ experience of members responding to correspondence suggests that for ‘within fund’ consolidations the appropriate mechanism may be disclosure through the Product Disclosure Statement (PDS), along with the members being given the option to opt-out prior to consolidation occurring,” the submission said.
The ASFA submission appears to support the arguments of financial planning organisations that annual opt-ins represent an unreasonable burden for planners with extensive client bases in circumstances where many do not appropriately respond to written communications.
AUTHOR
Mike Taylor
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
