Opt in costs 'negligible', says ISN

The Industry Super Network (ISN) is using commissioned research to claim the cost of an annual 'opt in' arrangement for financial planners would be negligible.

The ISN has released research undertaken by Sydney-based actuarial consultancy Rice Warner to claim the ongoing cost of an annual opt in is estimated at just over half one hundredth of 1 per cent of funds under advice.

It said that taking into account all of the establishment and ongoing costs associated with an annual opt in, Rice Warner had estimated it would cost the industry $28 million of the $1.6 billion in fees they would be generating a year.

The release of the Rice Warner findings came just a day after the industry funds released the results of a Newspoll supporting the opt in arrangements and just weeks out from the Government releasing the first draft of the legislation flowing from the Future of Financial Advice (FOFA) changes.

The ISN quoted the Rice Warner research as claiming opt in would ensure “adviser remuneration is aligned with personal exertion like other professions”.

The research also claimed “the changes proposed would appear to limit rather than expand the liability of advisers for ongoing advice”, it said.

The ISN claimed the financial advice industry is involved “in an unprecedented lobbying campaign of all federal politicians to water down the Government’s FOFA reform agenda by proposing consumers should have to actively 'opt out' of paying ongoing fees many are unaware they are even charged”.