There should be virtually no cost associated with implementing opt in, according to the chief executive of Industry Superannuation Network (ISN), David Whiteley. In an exclusive interview with Professional Planner, Whiteley says the only piece of credible, published research on the potential cost of opt in suggests the impact will be $22 million “across the entire industry”.
“But…my view is that it really should not cost a financial planner a cent, when talking to their clients, whether face to face or over the telephone, to gain their approval to continue to charge them for the next year,” Whiteley says.
“All we’re asking financial planners to do is to gain the permission and the approval of the client to continue to charge them another year’s fees. That’s all we’re asking them to do.
“And we’re doing this on the basis that the opt in or the annual renewal is a consumer safeguard against ongoing asset-based fees, which the regulator, ASIC, ourselves, consumer groups and many, many others regard as highly equivalent to sales commissions and as also creating conflicts of interest.
“It’s regrettable the financial planning profession has not embraced this reform, because it’s a great opportunity for them.”
When is someone going to muzzle these idiot industry funds?? Their “compare the pair” advertising is just plain rubbish – many public offer funds are now cheaper than industry funds and the claim that consumers are better off without advice – what a load of BS.
As for the ISN CEO trying to claim there is no cost for opt-in – he has no idea what is like to run a fin planning business. I guess if there is going to be no cost to opt-in then Telstra are not going to charge us for the phonecalls, Aus Post no charge for the postage and of course we and our staff will all work for free!!
I have no problem with opt in. However I have a real problem with this bloke pretending to be on the side of consumers and talking about conflict of interest.
He has a big conflict of interest in this debate. He wants to wipe our independent financial advicors so that his industry funds gain all the business for themselves. $22 million is worth society saving in extra costs.
If a company director made statements like his in a prospectus they would end up in gaol.
This bloke is a dill, all time has a value, does he think that making a phone call or taking time to see someone is without cost. He has no idea at all about running a business of any type.
Every time we contact clients there is a cost of time, disbursements ie cost of phone call and cost of wages. Now how can that be “costless”
There are no free lunches Whitely although I reckon you are probably getting one from your employer and they are too silly to wake up
It should be noted that the cost of opt in that David Whiteley refers to comes from an analysis by Rice Warner Actuaries. It’s also worth referring to comments on the cost of opt in made by Michael Rice during a Professional Planner roundtable recently, featuring Joe Hockey and Mathias Cormann. Michael’s comments can be found online here – https://www.professionalplanner.com.au/?p=9936 – and in the July edition of Professional Planner magazine.
There is, correctly, a debate about the likely cost of implementing opt in. We have one piece of analysis by Rice Warner; let’s look at alternative analyses as they come to light.
Simon Hoyle
Editor, Professional Planner
Sorry Simon, we are not buying this. David represents a body which is quite insideous in the way in which it operates. Take MTAA by way of example.
Take also, ‘compare the pair’ – the message to consumers that they will end up better of if they DO NOT consult a financial planner. Why should I listen to a representative of a body which needs to pitch its message in this way.
I’ll bet you anything that even if FoFA comes through in its present form, that particular ‘marketing’ won’t stop.
Why do you continue to defend David’s position on this?
I understand what you’re saying, about vested interests (parties on both sides of this debate have vested interests) and anything that raises the cost of advice for no commensurate benefit, or which jeopardises the relationship between planner and client, has to be treated with utmost caution, if not outright hostility.
But what I’m saying is, give me a piece of research that is as rigorous and on as solid a foundation as the Rice Warner research, and isn’t based on asking a group of individuals to stick a wet finger in the air and take a guess (such research may already be out there).
Let’s put some facts on the table – for and against – and argue about those.
Instead of imposing a carbon tax, why dont we just place duct tape around this blokes mouth. This will be extremely effective in reducing toxic emmissions.
Will industry funds be forced by legislation to gain the permission and approval of their clients to charge them administration and investment fees each year? Of course not. I don’t see why ongoing fees charged by advisers need to be legislated on and ongoing administration fees or ongoing investment fees charged by fund providers do not.
It is clear who is the tail wagging this government dog.
What a joke. Firstly, it is not ISN’s call to make. Clearly they have a vested interest and this is where his argument starts.
David knows nothing about running a financial planning practice so on that basis he is not qualified to be making any comment.
It is unfortunate that he fails to acknowledge that consumers will be worse off under opt-in, and all in the name of control of money.
It’s pretty disgusting.
Whitely has no credibility when it comes to running a financial planning business and understanding the costs associated with opt in or any of the other changes we are being told to accommodate.. When will publications such as yours stop providing space to someone with such biased uninformed views. What experience has he had at running any small business.