Petition says no to opt in

An online petition addressed to the Minister for Financial Services and Superannuation, Bill Shorten (pictured), is calling for ‘opt in’ to be scrapped.

The petition, forwarded to Money Management, stated that other Future of Financial Advice (FOFA) proposals would achieve the outcome intended by the opt in reform, but without adding a further level of administration. It added that the ban on commissions from 1 July, 2012 would ensure that advice costs were no longer embedded in the cost of investment products, and that clients would sign an agreement that expressly stipulates their advice fee and what is provided for the fee.

“Ongoing advice fees will remain visible to the client, allowing them to judge value and opt out at any time,” the petition stated.

It called on Shorten to allow the commission ban and fiduciary duty to achieve the objectives of the FOFA reforms, but to scrap opt in, which would create an unnecessary additional layer of administration and cost.

One signatory stated that the fact that most well-run practices had a structured review process with their clients did not necessarily mean that having those clients opt in to continue paying their fees would be cost-neutral, and easy to administer and police.

“Whilst I am supportive of many of the reforms in the FOFA paper, opt in is unnecessary in my opinion and will not achieve the outcome it is intended for,” she said.

Another commented that the reform should be ‘opt out’.

“No other service is opt in, why should ours be different?” she said.

Another asserted that overregulation destroyed small business and innovation.

“It is also a disincentive to create further employment and adds to business costs resulting in less private investment,” the petitioner said. “This opt in proposed legislation is a very backward step to the goal of improving client services.”

The petition is on the Go Petition website.