Financial Standard Comments - PJC hears FOFA lost in translation

Comment by Steve Cattz ()

Steve Cattz () — Mon, 23 Jan 2012 13:43:12 +1100

Is it just me or does this have potential litigation problems should a client not respond re opt-in and an insurance policy lapses? who is at fault? I am sure it will be the poor old adviser again?

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Comment by Lincoln ()

Lincoln () — Mon, 23 Jan 2012 13:47:25 +1100

The last point is the most relevant. Considering that most practices would stagger opt-in communications throughout the year, those clients that don't respond over the Christmas break or other holiday period could be left in the lurch.
As part of my relationship with clients and service as an adviser I communicate directly with clients about market opportunities (or risks) and their ongoing insurance renewals.
If the relationship was inadvertently opted out of and the client is uninformed about a potential market opportunity or lapses a policy and is no longer insurable they would have this government to blame.
We should have the opportunity to "opt" this government out every 2 years... that might give them an idea of what it would be like.

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Comment by Bill me ()

Bill me () — Mon, 23 Jan 2012 14:26:56 +1100

"The AFA believes that compliance with opt-in will add an extra three hours of time per client for each adviser, each year."
Must be using quill pens for this one!!

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Comment by Mike Bird, Authorised Representative, Halls Head, W.A. ()

Mike Bird, Authorised Representative, Halls Head, W.A. () — Mon, 23 Jan 2012 14:45:20 +1100

Over 25 years I have learned not to expect people to return relevant outstanding paperwork without constant reminder, follow up and going out to physically collect it. It just does not happen. Consequently, it makes any ridiculous "Opt In" "Opt Out" process totally impractical. We are dealing with human beings not programmed robots.
I ask the members of this Parliamentary Joint Committee to consider the amount of paper which builds up in their own lives and workplaces to contemplate realistically the probable failure of this proposal.

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Comment by Bob Burns ()

Bob Burns () — Tue, 24 Jan 2012 09:28:12 +1100

As a former adviser, I support the Opt In intentions. However, the point raised by existing advisers that people often fail to respond to paperwork is correct. I believe a mechanism that sees obligatory Opt In correspondence generated at the required time should exist. But if the client does not respond, then it should be taken that they have agreed to remain with the Adviser. That would provide a very necessary process whereby the relationship is "questioned" each period, but which requires action by the Client to end the relationship. I often had Clients who were Overseas for extended periods of time - what would happen if this coincided with the "required" Opt In process generation of correspondence? Good luck to those dealing with well intentioned but poorly constructed Legislation. Incidentally, the generation of a standard Opt In letter would take no more than 5 to 10 minutes. No three hours!! Savings & common sense! WOW!

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