Technology won't solve opt-in problem

financial-planning/Software/financial-planning-businesses/financial-planning-software/FOFA/financial-planning-association/financial-planning-industry/association-of-financial-advisers/AXA/

16 June 2011
| By Milana Pokrajac |

Despite a number of software developers and platform providers flagging plans to introduce opt-in facilities, the financial planning community claims automating the process would not fix fundamental issues associated with the Government’s controversial opt-in proposal.

In the past year, planners have cited administrative burden and additional cost as their main concerns with respect to the introduction of opt-in as part of the proposed Future of Financial Advice (FOFA) reforms package.

Responding to these concerns, both software developers and platform providers have recently come out with features they claim would significantly reduce the time and costs in administering opt-in.

However, while welcoming this type of innovation, both Financial Planning Association chief Mark Rantall (pictured) and Association of Financial Advisers chief Richard Klipin said the planner community would still oppose the proposal.

“Financial planning businesses have to look at ways of becoming efficient, but that is still not distracting from the fact that legislating annual or a [two-year] opt-in certificate is not an appropriate use of legislation – and we’ll continue to oppose it,” Rantall said.

Klipin added that automation could not replace the engagement advisers have with their clients, and that the association would always argue that opt-in is “bad public policy”.

Following the release of the FOFA information pack in April this year, financial planning software developers IRESS and Midwinter Financial Services have introduced facilities that enable automatic generation of emails or letters to clients, electronic opt-in features and alert emails sent to clients who are in danger of lapsing.

However, IRESS senior business development executive Michael Kinens believes a greater issue is at hand, noting that opt-in would always be seen by the financial planning industry as draconian and driven by an agenda that isn’t focused on the client’s best interests.

“There is a raft of arguments being put forward as to why opt-in is inappropriate, and regardless of what anyone does to make that effort less than what it is viewed as today, it’s still seen as the wrong solution for the industry – and you’ll continue to get people debating its introduction,” Kinens said.

AXA was one of the first institutions to flag the integration of the opt-in facility to its platform, but general manager for platforms Steve Burgess said he doesn’t believe anything platforms or software providers can do will make the issue disappear.

“If opt-in does come in and advisers either accept it or leave the industry, at least some kind of automated process would enable them to tolerate it from an administration point of view and therefore allow them to carry on largely with their business in a way that they want to,” Burgess said.

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 ago

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

2 months ago

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

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks 1 day ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS