A key element of Australia’s disclosure model could – no, would -- harm Canadian advisors if adopted here.
British financial magazine Money Marketing recently profiled Mark Rantall, CEO of the Financial Planning Association of Australia about the effects of tough financial regulations Down Under – rules now considered the most stringent anywhere in the world.
Particularly irksome for financial advisors in Australia are the opt-in rules which require them to contact new clients obtained after July 1, 2013, every two years in order to obtain written acceptance of the existing fee arrangement they have with their advisors.
Brad Fox, CEO of the Association of Financial Advisers, suggested this past November that the opt-in rule would result in thousands of clients having to be contacted since it took effect in 2013.
"It means financial advisers would need to have all clients who joined them after July 2013 opt-in every two years to stay a client," says Fox. Advisors are understandably perturbed because it forces them to create even more paperwork than they already produce costing them time and
Worse still, it’s uncertain whether this rule will do any good says Rantall.
“Whether it actually serves to protect the consumer is still a question. Maximum consumer protection comes from evolution and development of a profession. Legislation alone doesn’t adequately do it.”
Here in Canada we are facing a similar debate whether it be properly defining professions and titles or introducing legislation that protects consumers from unscrupulous advisors. There are people in both camps when it comes to how best to deliver financial advice.
Does Canada need to implement ‘opt-in’ rules? Share your comment.