Shorten shows he’s listening

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Bill Shorten, Assistant Treasurer and Minister for Financial Services and Superannuation has already demonstrated that he is a true advocate of the financial services industry, focused on ensuring that the interests of ordinary working Australians are best served.

CEO of the Association of Financial Advisers, Richard Klipin said two of Mr Shorten’s first announcements – last week’s announcement reaffirming the Government’s intention to raise superannuation guarantee (SG) contributions from nine to 12 per cent and today’s announcement to defer the application of the National Tax Agent Services Regime (the regime) until 1 July 2011 for financial advisers, reveals he has a genuinely consultative approach to the industry and the interests of financial advice clients at heart.

“Mr Shorten has barely had time to put his new job description on his business card and already he has demonstrated that he is a strong advocate for financial services, willing to listen to the industry’s concerns,” Mr Klipin said.

Incoming National President of the AFA, Brad Fox said the challenge facing Mr Shorten now is taking the spirit of consultation further into the world of Future of Financial Advice (FOFA) reform.

“We would encourage the minister to take the spirit of consultation he has so far demonstrated and apply it to the issues surrounding FOFA – in particular in relation to opt-in and insurance,” Mr Fox said. “We believe opt-in has the capacity to force the price of advice up, while banning insurance commissions is likely to exacerbate Australia’s under-insurance problem.”

Mr Fox urged Mr Shorten to address the real issues facing consumers, which include:

  • having enough superannuation to enjoy a comfortable retirement
  • the need to understand investment risk and make appropriate investment choices
  • having adequate comprehensive insurance to protect themselves against life’s uncertainties
  • understanding the importance of superannuation
  • developing trust and confidence to make important financial decisions instead of leaving them in the “too hard” basket

“Only 2.5 Australians in 10 currently use financial advisers,” Mr Fox said, “And yet, according to the AFA’s Back to Basics consumer research, those who do highly value the advice they receive; are better off financially and have greater peace of mind. We would like the government to acknowledge these facts and work with us to improve rather than hamper consumer access to advice so that more people are better off, better protected and ultimately enjoy a better, more secure post work life.”

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