Suncorp-owned insurance company Asteron has labelled the estimated cost of opt-in unrealistic and called on advisers to continue their campaign against the Future of Financial Advice (FOFA) reforms.
"Now that draft legislation is out, it is more important to speak out, particularly around opt-in," Asteron head of national sales Mark Vilo said yesterday.
Vilo welcomed the flexibility of the proposed opt-in approach, including allowing opt-in arrangements to be made either face to face or electronically, but said advice practices would still have significant challenges in managing the cost and the timing of the communication process to their clients.
Treasury said the estimated cost of administrating opt-in was about $11 a client, according to research by Rice Warner.
But Vilo said that figure was unrealistic in practice.
"There is a danger of underestimating the amount of time and effort that will now have to go into the preparation of yearly communications to clients, advising them specifically of fees, as well as the type of service they'll receive in the forthcoming period," he said.
"Irrespective of the communication medium being used, there will always be the challenge of client apathy. As an insurer, we recognise that in a typical busy household, letters pile up and sometimes don't get looked at for weeks."
Asteron has previously campaigned against the FOFA reforms, handing out material to financial advisers to lobby their local members of parliament.
"We intend to keep up the pressure, especially where it's clearly making advisers jump through more red tape without actually helping the industry or supporting more Australians to address the issue of underinsurance," Vilo said.
