Opt-in would magnify market dangers - Rantall

fpa-chief-executive/financial-planners/market-volatility/investments-commission/global-financial-crisis/FPA/chief-executive/australian-securities-and-investments-commission/

12 August 2011
| By Mike Taylor |
image
image
expand image

The market volatility of recent weeks has provided a prime reason why 'opt-in' represents bad policy with significant unintended consequences, according to Financial Planning Association (FPA) chief executive, Mark Rantall.

At the same time, Rantall has challenged claims by the Australian Securities and Investments Commission that a failure to implement opt-in might result in consumers paying for advice they don't receive because of asset based fees.

He said such claims by the regulator - contained in an answer to a Parliamentary question - were "nonsense".

The FPA chief executive made it clear that the close relationships which existed between planners and their clients were vital at times of market extremes, such as during the Global Financial Crisis and in recent days.

Rantall said it was the ongoing relationship between financial planners and their clients that enabled planners to act immediately in such circumstances and to provide advice and reassure clients, enabling them to make rational decisions.

"The proposed opt-in requirement could put at risk planners' ability to provide a critical response during crisis situations and market uncertainty," he said.

Rantall said clients should be given an annual opportunity to opt out of their relationship with their planner, but there were too many consequences associated with opt-in, including inadvertent exposure to investment risks such as superannuation contribution cap breaches and unmanaged investments.

Homepage

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 4 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND