Financial planner opt-in to cost $95 per client per year
The cost of the Government's two-year opt-in arrangements for financial planners would be $95 per client per year and not the "ridiculous" $11 cost adopted by the Federal Government.
That is the assessment contained in a submission to the Parliamentary Joint Committee reviewing the Future of Financial Advice bills compiled by Matrix Financial Solutions managing director, Rick Di Cristoforo.
The Matrix submission argues that the proposed two-year opt-in arrangements are not necessary, but if they must be introduced should be extended to three years, and preferably five years with an annual fee statement.
It said this would recognise that financial advice strategies need the fullness of a business/market cycle to evolve and demonstrate long-term goal achievement.
The submission said that while Matrix had noted the commentary from Financial Services minister, Bill Shorten, around the proposed flexibility of the opt-in process, this had not been reflected in the legislation, which had proved quite prescriptive.
"We would ask that when legislation is presented to the house for vote, and if it is not amended to recognise previously stated formats such as recordable and other electronic forms of disclosure and renewal, that it is argued that it do so by the PJC," the Matrix submission said.
It said that as a matter of interest, Matrix had estimated the cost of opt-in (including financial advice time, administration time, system and process development costs) at approximately 40 to 45 minutes per client or a minimum of $95 per client per year.
"We thoroughly refute the ridiculous assertion of an $11 opt-in charge, as it in no way properly takes into account any part of the process other than the preparation of the opt-in notice and a brief contact between financial adviser and client.
"There is clearly more to the process and issues management around opt-in than this," the Matrix submission said.
The Matrix document also pointed to what it said was a clear case of double standards that opt-in, transparent fee disclosure and scaled financial advice were proposed to prevent cross-subsidisation of clients within an individual adviser's client book, regardless of whether it is in the clients' best interest, yet it was seemingly acceptable that cross-subsidisation of advice was acceptable within certain financial products and providers.
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