In the aftermath of the royal commission’s second hearings, ifa ran a straw poll seeking feedback from readers on the inquiry’s approach and whether commissioner Kenneth Hayne and counsel assisting struck an appropriate chord.
Of the 1,456 responses to the ifa survey, 41.2 per cent of readers said that their assessment of the royal commission so far is that “it has been fair”.
An even greater cohort (47.9 per cent) responded that the Hayne commission has been “too lenient”, indicating they would support an even tougher approach from the commission in terms of its line of questioning and recommendations.
Just 10.9 per cent of respondents believe the inquiry has been “too harsh”.
The findings come despite suggestions that evidence before the royal commission may result in significant further reform of the financial advice business model, with major implications for practitioners.
Both ASIC and the FPA have argued in responsive submissions to the royal commission that grandfathered commissions should be banned in the near term, despite the official carve-out under the FOFA legislation.
Counsel assisting the royal commission Rowena Orr QC has also asked public questions about the appropriateness of the traditional dealer group model and operational model of the financial advice associations, indicating reform of these influential service providers may also be forthcoming.
Support for a tough approach from the royal commission also comes alongside noises that many advisers are seeking to change their current licensing arrangements or leave the industry.
In an article for ifa, M&A and licensing consultant Steve Prendeville revealed that his business has received a significant uptick in inquiries from firms looking to either leave an institutionally-aligned licensee to become self-licensed or join a more independent group, or leave the industry entirely.
Bell Potter Securities analyst Lafitani Sotiriou has also predicted greater movement away from instituitionally-aligned channels in the wake of the royal commission.
The royal commission is currently gearing up for its third round of hearings on small business lending, following the release of supplementary submissions from witnesses that appeared during the second round.
The royal commission is expected to hand down an interim report by 30 September 2018 and a final report by 1 February 2019.
The RC MUST focus on the morally bankrupt executives and their behavior both within Banks, Insurers and Industry Super Funds. Why is it that these people constantly deflect all attention from themselves onto advisers at every turn and everyone takes the bait?????? C’mon guys wake up!!
Utter BS. Not agreeing with the results of the poll, I have discussed this with a large number of peers and if anything they do not believe it fair, if anything biased and one sided. The RC has hand picked the worst of the worse and hung us all out to dry.
I was on a sport’s committee board and anything controversial we wanted passed we would carefully craft a ‘survey’ to elicit the responses we wanted, and then pass it at the next meeting. If taken to task we could always honestly state that the survey results supported it.
I would like to see IFA run another survey on whether advisers believe the RC has fairly scrutinised all facets of advice & wealth management, including ISA funds and their advice as well as whether the RC has adequately & ‘fairly’ scrutinised ASIC’s attitude and approach to investigating all avenues of advice provision. A supplement to that would be whether the RC has fairly given attention to ASIC’s handling and investigations into the management and boards who manufactured products that did not survive or were permanently frozen in the Post GFC carnage.
I believe the RC is a witch hunt intended to make the financial planner’s work more onerous and cumbersome, eventually forcing us to leave (regardless of age or qual’s) and above the reach of ordinary Australians due to increased fees (gees, wonder if it’s a coincidence that the ISA funds are likely to benefit?)
The bigger investigation or next morals audit needs to be done on the FPA.
One, to investigate further favourable treatment of FPA sweetheart members like Sam Henderson to uncover other scandals that have been watered down.
Two, to investigate their “education is everything” scam they have been pushing for decades and the direct result to their bottom line and the cost to the industry.
Three, to stamp out the above two behaviours in the future from happening anymore and to remove management that had any involvement in the above just like what is happening at AMP.
This industry is already 90% morally bankrupt. It needs change. URGENT CHANGE!
Education is the last thing it needs. That is a scam invented by the FPA and a scam the AFA is happy to tow the line with them. Both are milking it and taking advantage of the scam.
Advisers need to leave these industry bodies and start a new one. Only then will it be taken seriously.
Let me guess, you have DFP only? Maybe a grandfathered CFP…?
Let me guess, you work for the FPA. You joined last year and no nothing?
You peasent. Just because someone believes in education doesnt mean they are new to the industry. Just like it would be wrong to assume you are a baby boomer, without education, worried about changes to grandfathering.
No, I detest the associations. Why would someone criticising CFP work for the FPA… Id just like the industry to become a profession. Grandfathered conflicted remuneration and a straight up lack of education holds those who take the job seriously back in a big way.
Well said. Not to mention professional associations that only work for themselves. So far all I hear from the FPA is the sound of crickets. Yet they are still advertising that their professional partner firms (AMP/CBA) are wokring closely to shape advice in Australia.
The RC and FASEA is drawing attention to what advisers want out of a professional association. It’s certainly not being quite whilst advisers are blamed for poor conduct at the institutionally level in return for more members. One thing is certain and that’s being tired to the FPA and using the CFP logo is now very much a business risk. 2018 is a year the FPA will want to put behind them. I don’t think they’ll make 2019.
Dear non-CFP holder. Thanks for your opnionated drivel. The FPA will be just fine. Woof!
Flashheart your comment certainly did nothing to improve the perception of the FPA’s professionalism, nor intelligence of members for that matter. Well done!
I’m not representing the FPA. Simply making the point that these woeful end of the world predictions and disgraceful, dismissive statements as to professional credentials ought to be called out for what they are.
Lord Flashy I’ve stated cold hard facts. “Disgraceful” hardly not kind sir. What is “disgraceful” are FPA members who are before a Royal Commission and have been accused of lying to ASIC 20 times over etc etc. What is disgraceful are complicit FPA members. You’re obviously content with these affaris given you are most likely a “locked” in and continuing to pay FPA member fees. The FPA is more concerned about member growth then the advice needs of Australians. Just quit now, otherwise you Lord flashy are the unprofessional. CFP the sign of “poor & conflicted” advice.
FPA are stating that commissions be banned (they were part of the FOFA Grandfathering) so that it take the attention away from them in the way they handled Sam Henderson in the RC. FPA we don’t have short memories and were not stupid.
Wrong, John. Any recommendations should be both general (for the industry) as well as specific (to particular offenders) if those recommendations are to carry weight and authority. We know the banks’ model was wrong, but we also know they copied it from previous large operators…and then some! The advice industry has been riddled with conflicts from its very gestation and needs greater scrutiny, deeper regulation (I would simplify it rather than complicate it further) and both internal (self) regulation and legally binding rules of engagement to protect the public…just as any profession would expect.
In my humble opinion, the Royal Commission has inadvertently provided the adviser what we have all hoped for, for the last thirty years.
To be recognized as independent business owners providing advice and services to our clientele.
I fail to understand how AMP still has it’s license? as an AFSL holder if I had behaved in the manner they have, do you think I would still hold a license? the most important part of a law is that it is the same for everyone regardless. It should never be based on the to big to fail concern.
The adviser feedback relates to the behaviour of the banks and AMP that has been identified by the BANKING royal commission. Any regulatory change recommendations from the royal commission should target the behaviour of the banks and AMP not be generalised across all financial planners.
Make no mistake – the licencees will now come down hard on advisers for minor issues. They need numbers to demonstrate their renewed tough stance. I’m dreading the next audit. Perhaps i’ll resign in advance, for emotional and family reasons. We’ll all be on pre-vett status….all of us.
Ah pre-vet! Where as advisers we spend our considerable time training the Licensee’s inexperienced pre-vet auditors, so they can show how compliant we all are!
I recently had a pre-vet approval rescinded – 3 months after it was given! The original approval was given by an experienced auditor mind you. The reason I was given was “we audited the auditor and found their process was wrong”.
I appealed of course. And after much bank and forth, the original approval was reinstated (surprise). So you could say I was auditing the auditor who audited the auditor who audited the adviser! Hello – you couldn’t make this up! :D:D:D:D:D