Industry funds pressure Govt on opt in

Just weeks out from the Federal Government releasing the first draft of the legislation surrounding the Future of Financial Advice (FOFA) reforms, the Industry Super Network (ISN) has sought to increase pressure for annual opt in arrangements.

The ISN has released the results of research it commissioned from Newspoll to claim strong consumer support for more transparent charging for financial advice, “including being prompted annually to consent for any ongoing fees being deducted from their savings by financial planners”.

The Newspoll result found that nearly 75 per cent of respondents favoured annual renewal of ongoing fees (opt in) rather than what was described as the ‘opt out’ model being advocated by the planning industry.

The survey also found that nine out of 10 respondents believed there should be a law requiring planners to act in the best interests of clients, with 85 per cent expressing a preference for paying for advice via set fees or an hourly rate.

Commenting on the results, ISN chief executive David Whiteley (pictured) claimed the poll had made clear that “consumer expectations are aligned with the Government’s stated reform agenda”.

“Consumers clearly expect full transparency on fees, and are supportive of the Government’s agenda,” he said.

“If financial planners aspire to be professionals then they must charge like other professionals do — by an hourly or set fee paid by the client rather than volume based payments from product providers — and get annual permission from clients to continue deducting ongoing fees from clients’ investments,” Whiteley said.

He said the survey had shown there was clearly an expectation within the Australian community that the Parliament should act against unsustainable practices that were eroding public confidence in the finance system.