Asking clients to “opt-in” annually flies in the face of taking the big-picture, long-term view and is an anathema to the concept of advice.
“Financial planning is about long-term, strategic partnerships with clients,” a NSW-based practice principal said in the research.
“In an age where everyone expects instant gratification or results, this initiative completely misses the mark. Clients should have the right to turn off trails at any stage anyhow, so I fail to see what this achieves but creating more administrative/compliance work that adds no value and drives the price of advice up due to the time taken to deliver advice.”
The AFA recognises the need for reform in some areas of the advice industry, but opt-in is using a mallet to swat a fly. We believe a preferred and more workable option is “opt-out”. Clients who are unhappy with the service they are receiving can choose to no longer receive the service.
As pointed out in our research, “this alternative would not only reduce the paperwork for both advisers and clients but it also comes at no cost, removing the need for advisers to increase the fees charged to clients to cover the cost of the reform”.
As we move into the final phase of FoFA consultation, let’s reflect on the wisdom of English poet Samuel Taylor Coleridge: “If men could learn from history, what lessons it might teach us!”
Richard Klipin is the CEO of the Association of Financial Advisers.
