Survey says Govt's $11 opt-in cost a fallacy


The Assistant Treasurer, Bill Shorten, may have accepted $11 as the likely average cost to planners of implementing the Government's proposed two-year opt-in arrangements, but a significant majority of planners believe it will cost $100 or more.
That is the bottom line of a survey conducted by Money Management almost immediately following Shorten's release of the first draft of his Future of Financial Advice legislation last week.
The $11 a week figure was the result of research conducted by actuarial consultancy Rice Warner, and the company's principal Michael Rice has subsequently signalled it will be issuing a submission to further explain how the firm arrived at the figure.
Treasury officials earlier in the year indicated to a Senate Committee they had seen industry research suggesting opt-in would cost around $100 per client.
Money Management last week pointed to the Government's acceptance of the Rice Warner $11 assessment, and asked what they believed it would cost.
The survey found that 89 per cent of respondents believed it would cost more than $50 per client, while 66 per cent of respondents believed opt-in would cost at least $100 per client, with a further 5 per cent of respondents believing it would cost $75 per client.
Only 8 per cent of respondents to the survey agreed with the Rice Warner figure of $11 per client.
Full results of the survey are published in this week's edition of Money Management.
Recommended for you
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
New Zealand’s financial regulator is following the footsteps of its Tasman neighbours and proposing to conduct a review on improving the accessibility of financial advice and advice business models.