Breadth of reforms a key concern, says FPA

A key point of concern about the Future of Financial Advice reforms is its sheer size, according to Financial Planning Association (FPA) acting chief executive Deen Sanders.

Sanders said the high degree of confusion and questions among financial planners was partly due to the immensity of the reforms.

Sanders said the concern was not so much centred on understanding the Government’s intentions, but rather how they were captured in legislation.

“That’s often where the wheels come off a little bit,” he said.

Sanders questioned whether the industry would be able to adapt to the proposed reforms by July 2012.

“Business models will have to adapt to some of these changes in terms of technology and reporting, so there’s a lot to do in the two years,” he said.

He also said the Government needed to be careful with how it managed the “cultural message” around advice.

“For quite some time the Government has been kicking the advice side of the industry, while being supportive of the funds management side of the industry. We want to make sure that balance is addressed more accurately and that more Australians are encouraged by good government messaging to take advice.”

Sanders said there needed to be more clarity around the ‘opt in’ arrangements as well as fiduciary requirements.

He said the FPA was concerned that the ‘opt in’ arrangements would only create more work for advisers, and might create a situation where clients inadvertently ‘opt out’.