In the past few months, fingers have been pointed at Financial Services and Superannuation Minister Bill Shorten for his seemingly biased take on the reforms in favour of his ‘mates’ within the superannuation fund industry.
Since late April, speculation has filled the air over Shorten’s closeness, shall we say, with his former union tribe.
He has openly said not everyone would be happy with the government’s FOFA changes. Nothing new there, nor is the fact Australia’s retail advice/financial services sector is none too pleased by suggestions changes to the sector will ‘benefit’ industry funds.
The long-time rivalry between the sectors had died down a little, with many believing intra-fund advice and even the planned scaled advice FOFA reform would unite the sectors in reaching a common goal to reduce Australia’s advice gap.
Shorten is only one man, and depending on which side of the fence you stand, he is either meddling with a system that was not entirely broken, or is a man standing firm on beliefs others are too afraid to acknowledge. Change, particularly unknown change, can be too much for some.
Earlier this month, the Association of Financial Advisers (AFA) suggested the government’s proposal to introduce penalties on financial advisers, including potential million-dollar fines, was evidence the industry funds movement was attempting to drive the government’s FOFA policy.
“The government’s reforms are supported by a range of stakeholders, including Choice, the Institute of Chartered Accountants, ASFA (Association of Superannuation Funds of Australia) and many individual planning groups,” Shorten’s spokesman said.
“It is, however, a bit rich for one side of the debate, looking after their own special interests, to claim the other side is running government policy just because we aren’t doing exactly what they want.”
The spokesman said AFA chief executive Richard Klipin had “every right”, as did other groups, to push their views, however, the government believed it had struck the right balance with FOFA.
Just as the dust was potentially settling, the Australian Financial Integrity Network (Aus-Fin) stuck its nose in.
In a newspaper report last week, Aus-Fin (an alliance of industry funds and consumer groups) put forward a proposal for financial advisers to charge a set or hourly fee “like other professionals”.
In return, if financial advisers were to agree to such a change, Aus-Fin would oppose opt-in.
Unsurprisingly, blood boiled within the advice segment, with heads of both the FPA and AFA less than lukewarm on the idea.
“Before they start shining the spotlight on others, they should look in the mirror,” FPA chief Mark Rantall was quoted as saying.
“We don’t interfere in their pricing mechanisms and do not what them to interfere in ours.”
No-one wants to be told what to do, particularly from such an ‘expert’ in the field.
To borrow Shorten’s words, such an offer by Aus-Fin is “a bit rich”
