Christmas is D-Day for FOFA clarity: Barrett
The costs associated with preparing for Future of Financial Advice (FOFA) changes could double for ANZ if clarity around the implementation deadline is not received before the Christmas period, according to ANZ's general manager advice and distribution Paul Barrett.
That is because the group will have to start making changes on the assumption that there will still be a 1 July 2012 deadline. For some policy issues it will also have to prepare more than one alternative, without knowing yet what the outcome will be, he said.
"Assuming a 1 July 2012 deadline, if you don't get clarity around transition periods you've got to start opening systems up. You've got to start lifting the bonnet on various systems, you've got to start changing things and doing things. We've calculated that Christmas is about the drop-dead date," he said.
"We've worked out that we can hold on until Christmas, but beyond Christmas we've just got to start taking action. Some of those are more than one action on the same issue because we don't know what the final policy is going to be."
But if the industry knew that it would have 12 months to transition, it could afford to wait for further detail, he said.
Another major issue with the potential to significantly increase costs is the non-alignment of FOFA and MySuper reforms, which meant ANZ would have to open all those product systems more than once, he said.
"The big one for us is alignment of FOFA with MySuper… If we get that alignment we can open the system once, we can take the deep dive, fix all the bits we have to fix, change all the things we've got to change, then shut the bonnet, done."
Barrett said the conversations with Assistant Treasurer and Minister for Financial Services Bill Shorten had been productive, and he remained hopeful of getting a positive outcome.
"We'd just like clarity as soon as possible, one way or the other, whether it's 1 July 2012 or 2013," he said.
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