Caution urged on C and D clients
Financial advisers should not rush to shed their C and D clients because of the proposed opt-in arrangements, as they would then turn to intra-fund advice, according to Kerry Chikarovski, former leader of the NSW Liberal Party.
Speaking as a member of the financial services industry panel at the 2010 Association of Financial Advisers National Conference, Chikarovski said a greater turnout in the intra-fund advice space would act against the nation’s best interests.
She said simple advice would not result in pre-retirees accumulating enough funds for retirement.
“We so quickly write off those at the lower end of the market: ‘well, they can get the simple advice’. Those people are going to be on the pension, and future generations will still be paying for it,” added Chikarovski.
However, MLC group executive Steve Tucker held a different view at the panel discussion, pointing to the inevitability of people getting advice in different ways.
He claimed intra-fund could be seen as a step closer to people engaging with a financial adviser, who otherwise wouldn’t have.
“I am for all kinds of advice — if it’s minimalist and simple, fair enough, it will at least introduce people to the concept,” Tucker said.
“People are going to dip in and out of advice. I’m against opt-in, but we’ll have to learn how to deal with that as an industry,” he added.
The panel also addressed the reasons that remuneration structures dominated the discussions around the Future of Financial Advice reforms.
Tucker said financial advisers were losing a public relations war against the industry super funds and that “something needed to change”.
“Industry super funds won’t be able to run a ‘‘compare the pair’ campaign if there are no commissions to be paid to advisers,” Tucker added. “We have to diffuse the bomb. Industry fund campaign has been so successful and that’s why the reforms have been dominated by remuneration for superannuation,” he said.
AUTHOR
Mike Taylor
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