Monday, September 12th, 2011 - The Association of Financial Advisers: AFA
The uncertainty created by the draft Future of Financial Advice (FoFA) reforms will continue to shake out the market as businesses jockey for market position, according to the Association of Financial Advisers (AFA). The casualty of the uncertainty, says AFA CEO Richard Klipin, is a robust, healthy and vibrant independent sector, as demonstrated by the recent sale of Count.

“We believe that less competition in the industry and greater consolidation spells fewer choices for Australian consumers,” he said. “And while we congratulate Count, we believe the sale of the largest independently-owned network of financial planning accountants and advisers in the country, to one of the big listed players may be a sign of things to come.”

Mr Klipin said it is one of the unintended consequences of FoFA and goes against the interests of ordinary Australians.

Mr Klipin also said the Government’s agenda is now on show for all to see and again called on the Minister for Financial Services and Superannuation, Bill Shorten, to provide the evidence and modelling that back up his claims that the FoFA reforms will provide a ‘growth strategy’ for the industry.

“While the FoFA reforms were purportedly designed to protect consumers, the reality is the only winners will be industry funds and the big end of town,” he said.

AFA President, Brad Fox, said that while advisers are resilient, entrepreneurial and client-focussed, regulatory risk and uncertainty are having an impact on business flows, practice profitability and longer term planning.

“All businesses thrive on certainty,” he said, “and for more than three years we have had to operate in an ambiguous environment. It is time to draw a line in the sand so that we can all move forward with confidence.”

Mr Fox also criticised the Government’s use of Rice Warner Research, commissioned by the Industry Super Network (ISN), which indicated that the cost of implementing opt-in was in the vicinity of $11per client.

“The use of the research in the Government’s FoFA media release, without attribution to ISN is appalling,” he said. “It is misleading and partisan.”

Mr Fox was also critical of the Government’s decision to release the draft FoFA legislation in two stages.

“The Government delivered its first tranche of draft legislation late but has shown no signs of moving implementation beyond 1/7/2012. If advisers are expected to make significant changes to the way they operate, the Government must defer the implementation date.”

The AFA renewed its call for principle-based, rather than prescriptive legislation and is continuing to encourage its members to lobby their local MPs against the FoFA reforms.

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The Association of Financial Advisers: AFA


The Association of Financial Advisers (AFA) is the longest running professional financial adviser organisation in Australia and its members have been providing trusted advice to consumers for 65 years. The AFA celebrates its diamond anniversary this year. Through individual memberships and relationships with licensees, the AFA represents over 7,000 members. These members offer a broad range of financial advice services to ordinary Australians with many having specific expertise in risk protection. The AFA aims to provide a robust united voice for all financial advisers and their clients, continually improve practices and to focus firmly on the exciting, dynamic future of the financial advice profession. With six and a half decades’ success, the Association's ongoing relevance is due to its philosophy of providing leadership and direction to advisers and their clients. It is an association run by advisers for advisers - this means advisers set the agenda, decide which issues to tackle and shape the organisation's strategic plan.
Richard Klipin
P: 0412127834
W: www.afa.asn.au

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Keywords

FoFA, financial advice, financial advisers, financial planning, financial planners, Bill Shorten

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