The Government’s undertakings around the implementation of opt-in from the middle of next year have been effectively abrogated by Assistant Treasurer Bill Shorten’s decision to impose an annual fee disclosure on all financial advisers in the Future of Financial Advice (FOFA) bill.
That is the analysis of the Association of Financial Advisers (AFA) as it this week seeks to communicate with the key independents in the House of Representatives in a bid to gain their support for key amendments to the FOFA legislation – the Corporations Amendment (Future of Financial Advice) Bill 2011.
AFA chief executive, Richard Klipin said he believed the annual fee disclosure requirement represented a major blow and was something that would serve to add to the administrative burden being carried by planners.
"The minister has described the FOFA legislation as a plan for the growth in the industry but, if that is the objective, then it will ultimately fail as advisers are driven out just at a time when people need them most," he said.
Klipin said his organization was currently drafting communications to the independents and he believed much would ride on the attitude of Port Macquarie’s Rob Oakeshott and Tasmania’s Andrew Wilkie.
"We will be appealing to them to examine the legislation and its impact on the cost and availability of independent financial advice," he said.
The Financial Planning Association (FPA) last week signaled that it, too, would be strenuously lobbying the independents in circumstances where it could find no basis upon which it could support the Government’s legislation.
The independents are also expected to be lobbied by the Industry Super Network (ISN) and consumer group Choice in support of the bill.
