The Commonwealth Bank’s wealth business has already ceased implementing systems facilitating FOFA’s opt-in requirement, acting on the Coalition’s pre-election promise to repeal parts of the legislation.
Speaking at the recent Finsia conference, CBA executive general manager, wealth advice, Marianne Perkovic revealed the bank has already begun preparing for the changes committed to by the Coalition, including the removal of opt-in.
“With the change in government, people in pockets of the industry are suggesting there is the opportunity now to wind back parts of FOFA – we are strongly advocating some of that, where we believe it only has increased the cost of providing advice, without any customer benefit,” Ms Perkovic said.
“Given that we have the best interests duty, we always questioned whether opt-in was required. Opt-in should not be seen as just a box-tick situation…the removal is something we support.
“We have actually already stopped putting in place systems facilitating the opt-in requirement, and we know some other institutions have done the same.”
Ms Perkovic said the industry had been given assurances by former Coalition financial services spokesperson Mathias Cormann that an Abbott government would be “ready to go” on its financial services policy post-election, including winding back parts of FOFA.
As well as the removal of opt-in, the bank supports the removal of retrospectivity on fee disclosure statements (FDS), which Ms Perkovic says will simply create more paperwork for advisers, for little to no consumer gain.
“With FDS, while we are absolutely intending to comply with those requirements, when you look at the amount of paperwork that the client already signs – not just from the adviser but from the product manufacturer as well – I find it hard to believe that one piece of paper that outlines all these things is then going to give the client any additional security or comfort,” she said.
However, while Ms Perkovic questioned these aspects of the FOFA reforms, she said the bank fully supports other aspects such as the ban on conflicted remuneration and the fiduciary duty.
In its pre-election productivity policy document, the Coalition pledged a moratorium on further regulation of the financial services industry as well as promising to put the 16 recommendations it made to the parliamentary joint committee on financial services FOFA hearings to a vote in the federal parliament.
Addressing a press conference on Thursday, Prime Minister Tony Abbott said he will be announcing the recall date for parliament “shortly”, adding that he will not “bring parliament back prematurely for a photo opportunity”.
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