Minister for Financial Services and Superannuation, Bill Shorten MP, has told financial planners he “is listening very carefully” to suggestions that annual fee disclosure statements not be retrospective.
The controversial fee disclosure statement was a last minute addition to FoFA draft legislation.
However, Shorten said he was mindful of unintended consequences.
“It has been made clear to me that we need to be very careful about the form of the statement and its complexity,” he said. “Simplicity is much to be preferred over some great detail which will radically increase your costs of business.
“Many of you already have existing disclosure practices which will satisfy those requirements and we don’t want you to have to reinvent the wheel.
Shorten acknowledged the role of the Financial Planning Association (FPA) in arguing any new regulation on disclosure only apply to new clients.
“I am listening very carefully to the FPA and certain Government and Independent members who have said that if we are going to have this then let’s make sure the idea works and if we are going to get people to change some of their business model, let’s not do it in such a way that it inflicts massive retrospective costs,” he said.
Shorten said the Government’s position on enshrining the term “financial planner” in law would be clearer by the end of the year.
“Our aim is that by the end of this year we will release the discussion paper on…the implications of codifying and regulating the use of the term ‘financial planner’ so that people are confident in the brand of financial planning,” he said.
“I am certainly interested to protect the use of the term ‘financial planner’ in law,” he said. “There’s still a long way to go and as soon as we do it for planners, every other group is going to come out of the woodwork and say, ‘What about us?’
“But that shouldn’t be a reason not to deal with the term ‘financial planner’.
“And the FPA has been absolutely instrumental – it was not on my agenda until they raised it.”
Shorten also said he had referred to Treasury for review a proposal by the Australian Securities and Investments Commission (ASIC) that any person providing financial advice would be required to comply with an ASIC-approved code of professional ethical conduct.
“That’s sensible,” Shorten said.
“That’s industry building. That’s confidence building. That’s brand building. Consumers do need tangible evidence that financial planners work to high standards. I think this proposition is a positive step and I’ve referred it to Treasury for review.
“I also think your own organisation’s code of professional practice sets an ideal benchmark for this undertaking. Your code is widely recognised as being world-class. It’s certainly the standard against which the Financial Ombudsman Service sets its determinations.”
Voted labour most of my life. Not this time. Why doesn’t Shorten come and say he only wants Industry Funds to exist? Do Industry Funds have to declare where they acquire the millions of dollars that they use for advertising?
Yes people seem disinterested in where the money comes from to run those ads on tv and in newspapers and magazines. The industry funds are run only for benefit of members but what is the benefit to you when your funds are being used to advertise to get more members.
Australians honestly believe they are paying minimal fees when they are in an industry fund, just because they can’t see a deduction on their member statement does not mean fees are not being deducted from the underlying unit price (but that is not obvious to the average member).
Wake up Australia, no one works for nothing and industry funds are no different.