Opt-in and best interest a waste of time
Opt-in and best-interest reforms are a waste of time and a cost burden, according to Alexis Compliance and Risk Solutions director Christina Kalantzis.
Speaking at an industry panel on the opening day of the Association of Financial Advisers (AFA) National Conference 2011, Kalantzis said the financial advice industry already has contractual arrangements with their clients and opt-in is an expensive, bureaucratic exercise.
Sitting opposite the Federal Member for Oxley, Bernie Ripoll, Kalantzis said that all advisers have fiduciary duties to their clients that are currently enshrined in the 'Corporations Act 2001'.
When Ripoll was asked whether he believed the second tranche of the Future of Financial Advice (FOFA) bill was faithful to the 2009 Parliamentary Joint Committee recommendations, he said the reforms were better than he expected. He also denied recent allegations by the AFA that the implementation of parts of the legislation breached best practice policies.
"There's a difference in what exists in law and what exists in the culture of the adviser network," Ripoll said.
"It's about trying to get some of this (legislation) more ingrained and part of the norm rather that something that is done by only some sections."
Kalantzis argued that another major problem with the FOFA bill is that it fails to deal with the issues that surrounded the collapse of Opes Prime in 2008 and Storm Financial in 2009, the reason why the PJC was set up in the first place.
"What we've fallen short on is this whole focus on advisers and I can't really get it clear as to what's going on with product manufacturing."
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