Monday, September 12th, 2011
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.

Contact Profile

64 Media

64 Media is a public relations business specialising in financial services
Julie Bennett, 64 Media
P: 1300 077 036
M: 0407 071 121


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



More Formats

View QR Code