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.”
Interesting comments considering industry super are exempt from opt in – maybe all super industry and retail superannuation providers should be subject to opt in on product costs – as a large majority of these clients arent aware how their respective fees stack up against more flexible offerings – including valuable other benefits like anti detriment provisions and insurance flexibility – but thats advice I forgot
Surely receiving a statement disclosing these costs arent sufficient under the new world of disclosure – in the perfect world the client should be also acknowledging the providers fees?
well then, ISNs charge an asset based fee so why not give investors the chance to opt-in for another year of miserable returns with their industry super fund? no doubt plenty of objections to that one. . and by what “right” does this trumped up unionist make these demands on me?
Cost is “not one cent”??
Small business coach David is appearing next at Samuel Beckett’s Theatre of the Absurd.
When Shapespeare created the line, ‘Me Thinks Thou Doth Protest Too Much,’ it is obvious he based it on someone who had Mr. Whitely’s propensity for flogging an outlandish position to death in the hope that eventually he will be believed. The ISN will never agree to Steve’s proposition that they have Opt-in inflicted upon them for their annual fees for the simple reason that they know their argument is seriously flawed but it doesn’t matter because they have the assistance of a sympathetic and uncaring Government to advance their conflicted interest.
So will this mean that platform/product providers, such as industry funds will do the same (if the cost to manage is so small)? If clients do not agree to pay the MER’s and management fees for another year. Then the funds should be allowed to be transferred to a government run super cash account.
I thought Opt-In was Government policy, not the ideals of any particular industry group, however listening to this interview it woud seem that it is policy that is purely driven by Mr Whiteley with statements like ‘all we’re asking financial planners to do’….Sounds like a little bit of conflict of interest if this is the case!
OK no problem for planners to opt-in. As long as it includes the Industry Fund planners too. Given ALL Industry fund members pay for the advisers to provide intra fund advice to the few members who use it – then there are millions of Industry Fund members paying an advice fee eah year they have no idea that they are paying. Please get them to all to opt-in too, that’s only fair.
As for consumer groups, Choice Magazine debit subscribers credit cards every year ongoing without ever asking for subscribers to opt-in again to these fees.
People in glass houses should either play by the same opt-in rules or stop throwing stones. The hipocrosy and these mobs is almost laughable, if it was not so serious.
It as about time that SMSF industry and retail planners and their associations took the fight up to the Industry Fund lobby on the lack of transparency on the appointment of trustees in Industry Funds, the lack of professional qualifications for the same trustees and the scandal inside MTAA. These people are heavily conflicted in their views and public positions and they have the hide to issue threats to the SMSF sector about regulation after the findings of the Cooper Report.