Association of Financial Advisers (AFA) CEO Richard Klipin admits the Future of Financial Advice (FOFA) campaign is now a rearguard action and advisers need to lead the debate in the future.

“It is now half-time in the FOFA debate and we are one down,” he told the audience at an AFA roadshow in Melbourne last week.

“This is now the time when decisions will be made on our future.”

Mr Klipin says advisers should not stop lobbying their MPs as there is still time to influence a future vote on the FOFA legislation when it is released – possibly this month.

“We need to keep focused and lead the FOFA debate and turn it into an opportunity,” he said.

“This will be the making of the profession.”

Mr Klipin says while the AFA does support the principles of FOFA, the game changed when Assistant Treasurer Bill Shorten announced proposals for opt-in and no commission on life insurance in superannuation.

“Opt-in is going to hit every adviser’s cost structure,” he said. “For an adviser preparing for a review of the client’s businesses to enable them to sign an opt-in document, we estimate it will cost about $100.”

Mr Klipin says the product providers will have to build into their system the ability to turn off support to advisers when a client walks away.

He believes this will add an expensive layer of cost which will be passed on to the consumer.

“So why is this good for consumers?” Mr Klipin asked. “We don’t need the Government hovering over us telling us how we deliver advice to a client at a meeting.”

He said if a client doesn’t like an adviser they will walk away.

“We believe strengthening the opt-out provisions will do away with the endless amounts of paperwork opt-in will produce,” Mr Klipin said.

“There will be millions of bits of paper between insurers and advisers and the client from the opt-in proposal.”

He has warned the organisations driving the FOFA debate will not be giving in easily on the points they have achieved in the proposed legislation.

“The lobbying powers of the Industry Superannuation Fund Network and Choice are very slick and well organised,” he said.

“Crossbenchers [in Federal Parliament] are saying they are hearing more about FOFA than any other issue.

“Our campaign is biting and Mr Shorten is not very happy.”