Financial advice clients are voicing complaints about the amount of additional paperwork and costs associated with FOFA compliance, according to a CBA-aligned advice practice.
In a submission to the parliamentary committee overseeing the proposed amendments to FOFA, Financial Wisdom authorised representative Menico Tuck Parrish Financial Services reveals that its clients have reacted negatively to measures implemented to ensure compliance.
“The cost of financial planning in Australia is skyrocketing,” said practice principal Jo Tuck. “Instead of working with clients to address their needs, we are spending more time on administration that our clients do not appreciate or feel the need for.
“We are already fielding complaints about the amount of paperwork that has to be signed and it does slow up the advice process itself.”
The submission pleads with the government to “allow the financial planning profession to be ‘open for business’ rather than drown in a morass of administration” on behalf of “both clients and financial planners”.
In addition to extra paperwork, FOFA measures such as the opt-in and fee disclosure statement requirements are resulting in additional costs which are necessarily being passed on to clients, the submission states.
The opt-in requirement in particular is “dangerous”, it suggests, since the requirement assumes a client who does not acknowledge the communication has opted out, and does not take into account the client aversion to paperwork.
“The danger is that a client may think we continue to monitor their situation whilst in fact we do not have the authority to do so,” the submission states.
The revelation comes despite a number of community and media stakeholders hypothesising that the proposed amendments to FOFA may water down consumer protection mechanisms.
Are you experiencing a client backlash over FOFA-related paperwork? Have your say below
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