While AIOFP executive director Peter Johnston has previously said adviser associations should be “homologous”, and that the AFA should stick to life insurance advisers while the AIOFP should focus on the non-aligned sector, Mr Johnston now says the AFA’s deal with the FSC on the LIF has changed the landscape.
“The AFA has proven that it is supporting life insurers and not risk advisers by caving to their demands on hybrids and clawbacks,” Mr Johnston told the AIOFP’s offshore conference in Colombo, Sri Lanka.
Mr Johnston said it became clear in discussions with Minister for Small Business and Assistant Treasurer Kelly O’Dwyer that the government mistakenly believes all advisers back the LIF because of the AFA and FPA’s support for the framework.
“All these [IFAs that are members of the AFA and FPA] are doing is funding the enemy to act against their own interests. Being a member of [these groups] gives them greater leverage to say that they represent the entire industry and not just those aligned to the insurers and institutions,” he said.
The AIOFP said it has signed 49 individual advisers in the past 10 weeks, including a number of risk specialists, and is in advanced discussions with others. Several of these advisers voiced displeasure with the AFA over its role in supporting the LIF.
However, AFA president Deborah Kent has previously commented that the AFA’s involvement in the LIF process prevents a potentially worse outcome for advisers, while CEO Brad Fox described the eventual compromise as a “big win”.
“We could [have] ended up with something like a nil commission [model],” Ms Kent said. “There are still others out there that would rather see us have nothing, or [even] level commissions, which was [recommended] in the FSI report.”
Easy to throw around accusations when you don’t have a seat at the table. AOIFP is the Greens of the adviser associations. All care no responsbility.
Seriously? – What an insulting and seriously wrong analogy.
Aside from your disgraceful use of rape as a comparison the AFA and FPA have a constitutional obligation to object to the blatant misrepresentation of risk advisers by ASIC and the FSC with hard facts such as is being done by the LICG – its their job.
Instead we have a too heavily funded AFA and FPA by members of the FSC to act in the right manor and weak leadership to the extent that they are good for nothing much more than attending dinners and handing out awards these days.
I could not agree more with this article. Until the AFA and FPA stop being so heavily funded by the companies within the FSC they can never truly be impartial, independent or supporting the best interests of the end consumer or their members which is their constitutional duty.
The FPA and particularly the AFA did not have the support of their members when negotiating the LIF. End of story.
The LIF framework does not work for the consumer and is only within the best interests of the insurance companies and perhaps the few planners with high net worth clients. End of story.
I have to agree with Wayne
Sorry, what? Johnston’s argument that the FPA & AFA support LIF is like saying a rape victim enjoyed the experience because they didn’t scream and put up a fight! Sometimes you are forced to make the best of a bad situation to avoid it resulting in something even worse!