ifa has learnt that advisers collectively are forwarding identical letters to their local MPs and senators, cautioning against the government’s mismanagement of advice legislation and regulation, with the correspondence, seen by ifa, believed to have been distributed to advisers by adviser networks for onward transmission to their parliamentary representatives.
The letter delineates “recent actions and proposed legislation” that, it asserts, contradict the government’s professed goals of enhancing the affordability and accessibility of financial advice, instead resulting in “significant cost increases for consumers and further restricting access to professional advice”.
These actions include the Compensation Scheme of Last Resort (CSLR) levy, to which the letter says, “Assistant Treasurer Stephen Jones appears indifferent”.
The letter details that projections suggest the CSLR levy will amount to $5,709, which, coupled with the ASIC levy of $2,818, imposes a total cost of over $8,500 on each adviser, compelling them, and ultimately their clients, to bear the financial burden for the transgressions of a major, defunct entity such as Dixon Advisory.
Moreover, it points out that the parent company of Dixon Advisory, Evans and Partners, earned over $174 million in revenue last financial year, yet advisers are being asked to foot the bill for their subsidiary’s failures.
“Most financial advisers like myself, are small business owners who prioritise their clients’ interests. Holding them accountable for the failures of large corporations like Dixon Advisory is unjust and unsustainable,” the letter reads.
Moving on to recent legislation, which was agreed to by the House of Representatives last week, the letter says that the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill appears to covertly restrict advice fee payments from superannuation, potentially impeding access to quality financial advice and raising costs, despite its professed goal of reducing red tape and promoting affordable advice.
“The amendments introduce substantial administrative burdens, requiring superannuation funds to rigorously assess the member’s justification for advice payments and the proportionality of fees. This subjective process duplicates AFSL responsibilities and increases costs for all members,” the letter further states.
“Both the Financial Advice Association Australia (FAAA) and Financial Services Council (FSC) have called for explicit changes to the provisions in the bill to ensure the regulatory burden on trustees and/or advisers does not increase, which is the opposite of what QAR lead Michelle Levy sought to achieve. The minister has dismissed these concerns without explaining the consumer protections these changes supposedly provide,” it continues.
The letter ends by imploring the Parliament to address the accessibility threats posed by the CSLR levy and the Treasury Laws Amendment Bill as a matter of urgency, adding that this is key to maintaining “affordable access to financial advice”.
ifa has yet to determine the origin of this letter, however, several groups have confirmed that they have seen it and support the initiative.
Speaking to ifa, Keith Cullen, managing director of WT Financial Group and a member of the Licensee Leadership Forum, confirmed that he has seen the letter.
“I am aware that it is circulating in the network, and I think it’s great that advisers are getting organised and they should be encouraged to get involved in the political process.”
ifa understands that the letter did not come from the FAAA, but the association is planning to launch its own campaign regarding the unjust CSLR cost being imposed on advisers.
Speaking at ifa’s Adviser Innovation Summit on Tuesday, the CEO of the FAAA, Sarah Abood, said, “It’s really important for us to make a stand on this”.
“This is something we’re angry about, and we have launched a member campaign, so for any members in the room, there’s a campaign. If you send a note to policy@faaa.au, we can include you in the campaign. It’s likely to start with engaging with your local member and letter writing and it will go on from there.
“I think it’s important that we, as a profession, get together and make sure this thing is put on a sustainable footing.”
I don’t know about everyone else but if they ask for 1 more cent of CSLR funding from me I’m going to hand in my registration and go do something else.
This really is the last straw for me. Plenty of other ways to earn a living out there.
I would encourage other advisers to go down the same track to send a message but I doubt it will happen.
The letter essentially becomes a “class action” without the need for lawyers. Well done!!
Writing letters to politicians is fine but that has not worked well in recent times so
think advisers would be better placed with additional strategies such as having a full time lobbyist based in Canberra paid for by your associations who hold war chests from the fees you pay them…
Also having the FAAA speak on mainstream TV and all other media to raise public awareness of these ridiculous costs being unfairly placed on advisers which in turn means their clients pay additional fees unnecessarily…
A multi layered approach should achieve better results than letter writing alone.
“Indifferent”? No way. Not Jones. He has contempt for us snake-oil salespeople. He constantly trots out “we hear you” and “we get it” whilst doing his best to mask his utter contempt for us advisers.
I hope this actually results in some change. Financial Advisors have for too long been given the short end of the stick and expected to just deal with our industry being ripped apart. Businesses lost overnight and the mental health of many Advisor’s being dramatically impacted are just a few of the issues.
– We are expected to jump hurdle after hurdle for compliance purposes which increase the cost to the business and client.
– Our licensee fees, system fees, BAS, employee salaries, rents and other costs all go up, while we are expected to reduce our fees in an environment where the profit margin is barely there.
– We are forced to pay for other bad actors and institutions in our industry even though you could have an impeccable record.
– There are more exits from the industry to entrants as they see the number of struggles to be a Financial Advisor both business wise and career wise.
What other industry is this happening to?
26 left last week.
Would be fantastic to get a copy of this letter for the own license cohort to be able to get behind as well
Happy to share the letter
Email: hello@gwealth.net.au
Text me your contact details on 0421144576 and I’ll forward copies as we’ve seen it.
What a great initiative, in fact something I was looking at doing myself. Does anyone have a copy of the letter, so I can forward it to my Local Member?
Happy to share the letter I sent to my local MP.
Email me at: hello@gwealth.net.au
Send me your contact details and I’ll forward a copy that we got
When Labor came to power, they talked up the wonders they were going to do to make financial advice more affordable and accessible to more Australians. After two years in power, we’ve seen NO measures to make the provision of advice easier, other than allowing their “friends” in industry funds to enter the advice space. Concurrently, we’ve seen a HUGE increase in the costs imposed on financial advisers to pay for the sins of the past committed by those who have since left the industry.
If this is their idea of “fixing the hot mess”, I’d hate to think where we’d be if they hadn’t made such a promise!
Evans and Partners need to take responsibility here and have all the burden put on the industry
Jonesy is a Liar
ASIC are useless, corrupt and Liars
Advisers are getting totally screwed yet again on multiple fronts.
Great job to those Advisers who have done this.
Please share the letter for others to use.
Happy to share the letter I sent to my local MP. Email: hello@gwealth.net.au
Please send it off to the media as well. They won’t mind getting stuck into deadbeat politicians.