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Platforms weigh in on opt-in debate

Platforms move to lobby Canberra as consultation begins on opt-in. We speak to Connie Mckeage of OneVue and Kelly Power of BT for their thoughts on the proposed regulations and what planners can do to prepare for implementation.

Video transcript below:

Donna Sawyer, Wealth Professional
Donna Sawyer:
 It’s time to take a seat at the negotiating table for the next phase of consultation on FOFA . This time the controversial opt-in clause is at the centre of talks.  Connie Mckeage  of Onevue says opt-in legislation should make a distinction between advice and an ongoing relationship between financial advisor and client.

Connie Mckeage, Onevue
Connie Mckeage:  Opt-in is being seen across the industry of, if you don’t want advice, you no longer have any relationship with an advisor.  I think that is leading to discord in the industry between major platforms, some manufacturers and advisors, because they are saying, you know we are doing all this work and all of sudden theoretically there is no cliemt.  The way that we see it differently, is they haven’t opted out of the relationship, they have just temporarily opted out of advice.  It’s quite different.  So that I think is a major distinction and one that we will be lobbying strongly for is that the advisors still own the client, that client just doesn’t happen to want advice at that point in time and they should be remunerated accordingly for servicing the client without giving advice and that’s where we are different and we are very supportive of ongoing advisor relationships even if advice comes sporadically.
 
Kelly Power, BT
Kelly Power:  We believe strongly in anything that supports the value of advice and increases consumer confidence in engagement with the advice industry and so we support on that basis any of the provisions that get that outcome.  What we want to avoid, is having an opt-in process that creates a lot of administrative burden for our advisors, lots of red tape and then effectively increases the cost of advice and makes it inaccessible and unaffordable for Australians.
 
Donna Sawyer:  Kelly Power of BT says platforms are already developing software to assist financial planners transitioning to opt-in.  
 
Kelly Power:  One of the things our planners are really telling us and looking for as a part of this transition is help in education.  So we have built a website to support them with that.  It’s btft.com.au\frank, so we are calling it our frank website and it’s giving uptodate information about regulatory changes, specifically around FOFA.  Some of the other things that we are doing to support our advisors is we are building functionality to help them make the transition.  So that includes information on our desktops around grandfather clients, it includes some information and support around advisor fee disclosure statements and also tracking of opt-in.  Other things that we are doing more holistically in our platform offering is building low cost alternatives for advisors who are transitioning their fee sensitive clients into those products.
 
Donna Sawyer:  While the industry is still engaged in consultation on the issue, there are things advisors can do to prepare for implementing opt-in.
 
Connie Mckeage:  The first thing I would do if I were an advisor is insist that there be a clause in the contracts that I have with my platform providers, that if the customer opts out, that it is very clear with fees, that he is opting out of advice and not opting out of the relationship and that the ownership unless the client proactively also opts out of the ongoing relationship with the advisor, that the customer is not an orphan client available to be picked up.
 
Kelly Power:  Use it as an opportunity to demonstrate the value of the advice that you are providing. So the fact that you have to list all of your services and the cost to say, if you are able to pick them, it’s a real opportunity for you to show your clients, I am providing a valuable service for the cost and the charges that you are paying.  The second piece of advice that I would give to advisors would be, look for help from your platform provider and your planning software provider.  You are not alone in this, your platforms are there to help you efficiently execute your advice.  So look for a platform that is going to offer you tools around advisor fee disclosure statements or support in tracking opt-in obligations or support in managing the communication with your clients.  Also look to your platform provider to give you information around what’s happening with regulatory changes and to lobby on your behalf.
 
Donna Sawyer:  This is Donna Sawyer reporting for Wealth Professional.