Treasury warned of standardised advice consent form boondoggle
Treasury’s efforts to have a standardised consent form in place covering advice fees within superannuation are struggling to garner broad-based support.
The move for the standardised form was part of the implementation of the first tranche of the Delivering Better Financial Outcomes (DBFO) legislation which passed in July, but Treasury consultations have so far failed to achieve the necessary industry consensus.
In fact, Australia’s largest superannuation industry body, the Association of Superannuation Funds of Australia (ASFA) has bluntly told Treasury the prospects of reaching a necessary consensus are remote.
In a submission to Treasury responding to its consultation on the Standard Consent Form, ASFA stated: “From the outset, ASFA wishes to state as clearly as we can that our members do not believe the two necessary preconditions outlined by Treasury have been met,” it said.
“That is – we do not believe there is broad consensus for the approval of such a form, neither do we believe it is clear efficiency benefits will be achieved.”
ASFA then went on to raise a series of issues including that “for any form to be effective in this space, it would have to have the unanimous support not only of the superannuation sector, but of the professional advice sector”.
“Such consensus does not exist presently,” it said.
ASFA then pointed to the existence of “already extremely rigorous standards with which financial advisers must comply” including in the Corporations Act, the Better Advice Act and the Financial Planners and Advisers Code of Ethics.
“This multiplicity of obligations has been outlined in detail by ASIC. Many advice leaders across our sector indicated that additional mandatory requirements, such as standardised forms, may in fact impede efficiency, not promote,” ASFA said.
“The requirements as outlined in the legislation are already exhaustive and clear. Any standardised form sitting underneath these legislative requirements would, at best, just be a repetition of existing requirements which are already in legislation.
“At worst, supplementing the legislation with a standardised form could lead to duplication and/or confusion which would undermine overall compliance. This would not achieve Treasury’s stated objective of increased efficiency.
“Different entities are already in the process of meeting compliance with their requirements under Tranche 1. If a standardised form were issued on or before 10 January, then this would require uplift in systems tantamount to a second build to meet compliance with one set of requirements. This risks great wastage in terms of time, resources and capital for no discernible consumer benefit.”
Canberra bureaucratic clowns churning out more Red Tape madness 🙁
How pathetic, but entirely predictable.
From day 1, it was said that product manufacturers would not want to update their systems. They do not care about red tape reduction. In fact it will benefit them, as they will soon be competing against us with quasi/sales driven advisers who won’t have to worry about most of the red tape real advisers are drowning in. The more unlevel the playing field, the better for them.
The fact that Jones handed these product groups a veto over whether or not we would have a red-tape reducing standardised form shows he never actually wanted or cared about red tape reductions at all.
Once again the FAAA is shown to be naive and completely ineffective.
No surprise, same as previous attempts to change compliance requirements. How pathetic, but entirely predictable sums it up perfectly
There is no acknowledgement here of the clunky and laborious processes the product manufacturers have put in place, which are vastly different from one provider to the other.
“This risks great wastage in terms of time, resources and capital for no discernible consumer benefit.”
The whole idea of this change is to reduce the end-to-end time impact on advice practices. These poorly constructed processes cost us significant money now. These costs are passed on to our clients through higher fees to cover this time.
This is before you consider the added time with forms being deleted by platforms due to back-end processing or system changes which results in us needing to regenerate said forms.
The amount of effort required now to simply be paid is astonishing…
Santa is going to bring you a Pony too. As is Super funds would want to save Advisers or Australians some time or money.
We have standardized AML/ CTF forms now and written into law is the ability for a Super fund to rely on Financial Planners process. Yet show me a single Industry Super fund that will rely on an Adviser to identify a client and I’ll bring you a Pony for Christmas.