FPA continues call to scrap Opt-in The FPA has continued its call for the Government to reconsider its position on a two-year Opt-in, citing market volatility and contradictory statements by the Australian Securities and Investments Commission (ASIC) as further examples of potential unintended consequences of legislating an Opt-in requirement. Following lengthy discussions by the FPA, the Assistant Treasurer and Minister for Financial Services, Bill Shorten, last month indicated that the Government would reverse a decision to ban commissions on insurance inside superannuation on personal advice. When announcing this decision, Shorten publicly paid tribute to the FPA, acknowledging the lobbying efforts of the Association. However, despite this announcement, Shorten said he remained totally committed to the two year Opt-in. While welcoming the Government’s decision to concede ground on individually advised risk commissions in superannuation, the FPA said
longer be in a position to be notified or advised by their planner.
Bill Shorten, Assistant Treasurer and Minister for Financial Services
it would continue to call on the Government to review its position on Opt-in ahead of the release of draft legislation. “Opt-in is an onerous proposal that won’t benefit Australians seeking financial advice,” said FPA chief executive officer Mark Rantall. “We have welcomed, and lead the way, in introducing a best interest duty and the banning of commissions on investments, which in effect makes Opt-in a redundant policy. Rantall cited current market uncertainty as a prime example where Opt-in would not benefit the consumer. Noting that if a client failed to Opt-in last month when global markets reacted adversely to the credit downgrading of the US, they would no
“The proposed Opt-in requirement could put at risk a planner’s ability to provide a critical response during crisis situations and market uncertainty such as being faced by all Australian now. Current market volatility is a perfect illustration of the dangers of Opt-in.” Rantall was also critical of ASIC’s claim that not having Opt-in may mean that consumers could pay for advice they do not receive due to asset based fees. “This is utter nonsense,” he said. “If the issue is either asset based fees or ongoing fees then let us have that debate. It has nothing to do with Optin. You can still have an ongoing fee that is not asset based and provided it is not embedded in a product, then the client has total control over whether or not they continue to pay that fee.” Rantall said by all means “give clients the opportunity to opt-out every year, but forcing clients to have to Opt-in is an added burden they shouldn’t have to bear”.
Hurry, Best Practice Awards closing soon Entries for the FPA’s inaugural FPA Best Practice Awards close on 16 September, 2011, so get your submissions in quickly. The awards, which replace the FPA Value of Advice Awards, recognise outstanding achievement by practitioners in demonstrating their professional planning expertise for clients in line with the FPA’s Code of Professional Practice and Code of Ethics.
FPA hits out at ISN campaign The FPA has come out firing at the latest Industry Super Network (ISN) advertising campaign, calling it a “disgraceful and hypocritical attempt to spread fear and misinformation about advice, those qualified to give it, and fees in superannuation”. In challenging the ISN campaign, which calls on consumers to avoid paying ongoing fees for advice, FPA chief executive officer Mark Rantall was furious the consumer message denigrates the legitimate and valuable ongoing service provided to clients by FPA members. “Indeed, our view is that the advertising is selective, factually incorrect and politically motivated,” he said. According to Rantall, the FPA has taken actions to redress the “imbalance and dishonesty” in the ISN’s message by: • Raising its concerns with the Government and expressing the FPA’s views on the ISN’s campaign; • Calling on the Government to disregard any contribution made by ISN to the FoFA reform process, due to its self-interested, politically motivated and factually incorrect campaigns; and • Contacting media to express the FPA’s views on the campaign.
• Future2 Community Service Best Practice Award. The Future2 Community Service Best Practice Award differs from the other two awards by specifically recognising those CFP or AFP members who have made a significant contribution to the wider community through a voluntary, pro bono or public service capacity, by improving the circumstances of individuals who are socially and/or financially disadvantaged.
FPA members can provide submissions in three categories: • FPA CERTIFIED FINANCIAL PLANNER® Professional Best Practice Award;
Chapter award winners will be announced in October, with the national winners presented with their awards at the FPA National Conference on 17 November.
• FPA Associate Financial Planner Best Practice Award; and
For more information or to download the submission, go to www.fpa.asn.au.
“FPA practitioners adhere to the highest professional standards,” Rantall said. “They are accountable to an enforceable Code of Professional Practice and Ethics, and are committed to client disclosure and transparency in the fees they charge. “To attack the value of advice through factual inaccuracies, is an attack on the valuable ongoing service provided by FPA members to their clients. This is totally unacceptable.” Rantall called on members to visit or write to their local MP and express their outrage at this latest ISN campaign, and explain to them why it is misleading to consumers. financial planning | SEPTEMBER 2011 | 7