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.