Rice Warner has defended its costing of the opt-in proposal used by Assistant Treasurer Bill Shorten when launching the draft Future of Financial Advice (FOFA) Bill.

The actuaries estimated the annual ongoing cost of opt-in would be $11 a client, a figure that has been widely disputed by the financial advice industry.

“It excludes any costs associated with other parts of the FOFA reforms,” Rice Warner said in a statement.

“We have also made an important underlying assumption that advisers are already in regular contact with their clients, meeting at least once every year.”

It has estimated the implementation cost to a dealer group of opt-in at $105,000, with ongoing costs of $110,000 a year.

For product providers, the implementation cost would be $1.4 million and the ongoing cost $450,000.

These assumptions are based on there being 25 product providers and 100 dealer groups.

This means the total implementation cost to the financial services industry would be $46 million with ongoing costs of $22 million a year.

Based on the Australian Securities and Investments Commission’s estimate that 2 million people are receiving financial advice, the annual cost of opt-in would be $11 a year per client.

Rice Warner says existing clients will be “grandfathered” and the opt-in provision will only apply to new clients from July 1 next year.

The first occasion these clients will be required to sign an opt-in document will be July 1 2014.

“Advisers who adapt their business models to include annual or biennial client reviews for all new clients will be able to incorporate opt-in processes as part of their normal client management,” the actuaries said.

“The cost of ‘opt-in’ should not be confused with the cost of contacting clients who are not serviced regularly, or the implementation and ongoing costs of other FOFA reforms.”