In a statement made available to ifa, the executive director of the Association of Independently Owned Financial Professionals (AIOFP), Peter Johnston, said the body is “unashamedly and unapologetically” representing the “best interests” of advisers in opposing the Quality of Advice Review (QAR).
Mr Johnston’s strong response followed the publication of an open letter by the Joint Association Working Group (JAWG) — made up of 13 key associations, including the FPA, AFA, FSC, SIAA and TAA — addressed to Financial Services Minister Stephen Jones last week.
In the letter, JAWG threw its support behind many of the final recommendations of the QAR and confirmed its willingness to collaborate with the government on implementing “much-needed change” to ensure “many millions more Australians can access advice for decades to come”.
Accusing the JAWG of stating the “bleeding obvious”, Mr Johnston said the working group appeared to now be taking a “more generic position” on the QAR.
“The AIOFP chose to not support the Levy QAR from the beginning, was not officially asked to join JAWG and would have chosen not to join anyway,” Mr Johnston said.
“The similar position we took in 2015 to not join the FSC/AFA/FPA supporting Minister O’Dwyer with LIF/FASEA etc. We are unashamedly and unapologetically always representing the best interests of advisers, no compromising,” he said.
Mr Johnston also questioned the composition of the working group, drawing attention to the inclusion of several accounting bodies.
He also queried why an industry that has suffered a major exodus still boasts 13 associations.
“We only need three associations for the advice community; the mortgage industry only has two and it works,” he said.
Last week, the JAWG said that any response to the QAR must increase access to quality financial advice while maintaining appropriate consumer protections that are proven to work in the interests of consumers.
“The number of Australians who now receive financial advice has fallen by around half. At the same time, the number of advisers has dropped to around 15,800 from over 26,500 in 2019. The average cost of financial advice has increased steadily to over $5,000.
“Urgent action is needed; the government has a rare opportunity to deliver affordable and accessible advice to consumers as an outcome of its response to the Quality of Advice Review,” the group said.
It made several requests to the government, including that it removes regulatory and disclosure requirements not benefiting consumers and reduces the time and cost to prepare quality financial advice.
Their stance on FARCEA has proven to be correct. It was a dogs breakfast.
Well done AIOFP… As a financial planner, I believe it will lead to a significant disadvantage for all Australians. Rather than looking at how we can increase Australians’ access to Advice, we’ve gone 1+1 =3 and merely said how can super funds deliver advice more easily. Two very different concepts.
Just why did we go straight to carve out for Super funds and not carve-outs for Advisers ? Michelle Levy recently in made the statement that Advisers have a poor record so beggars can’t be choosers and so let’s rule that channel out. So that leaves Super funds and a few crumbs for Advisers to keep them happy (why is the FPA supporting that) I can’t support that and giving more of a voice to the FPA/AFA that are supporting the QAR is bizzare.
Well said.
‘We weren’t invited to the party and even if we were, we wouldn’t have gone anyway’… so nah nah ne nah nah… I mean really…
So the AIOFP said they “chose to not support the LEVY QAR from the beginning”. What a totally non sensical position to take. I think that we can all agree that the financial advice regulatory regime is totally broken. Stephen Jones described it as a “hot mess”. The Quality of Advice regime is the only inquiry in play that is going to fix this mess, so being opposed to it from the start is just ridiculous. The only other groups to have been totally opposed are the consumer groups. What a nice look to have the AIOFP and Choice on the same page.
It was obvious the QAR was never and will never be advantageous or beneficial for advisors, just like every other review/enquiry/commission being run by people from outside the industry so they were right in not supporting it. These other associations are supposed to be working for advisors NOT the consumer as an arm of the government. They are not consumer advocacy groups but nobody would know that given their comments. AIOFP was right on FASEA.
So straightshooter, if you want to keep doing FDSs and doing SoAs for simple advice, then I guess it is obvious that the QAR was never going to deliver anything advantageous. The QAR is expected to deliver benefits to both advisers and consumers. If you think that Michelle Levy was just asked to make the world better for advisers, then you are missing the whole objective of the Government’s review.
Is the objective to allow Product Providers to recommend product to retail clients without the requirement for the advice to be in the best interest of the client – all paid for via the Administration fee regardless of need? QUALITY of Advice in deed.
What is next, no need for Doctors – let the drug companies recommend product?
Fact Check – really – QAR recommending advice be provided by Product Manufacturers and obviously not in the clients best interest – probably assuming poor people don’t deserve Advice in their best interest – but it might be good advice for the product manufacture – all paid for by the product manufacturer who charges the members/client regardless. You support that – yes?
Well said Peter,
The AIOFP proving yet again what an irrelevant voice they are in the financial planning landscape, only representing the few advisers who still want trail comms on super, 4% entry fees and churning of insurance. This annoying voice thankfully is getting quieter and quieter and will eventually be silenced as the profession moves away from their sensationalist headlines and immaterial viewpoints.
The AIOFP is the only body that actually calls out all of the irrelevant, time consuming and costly ‘initiatives’ that are invariably implemented as a result of these reviews. Insurance churning and other despicable behaviour is at one end of the spectrum and the new tighter regulations always at the other end, but you, like most other people, forget that there is a lot of middle ground. Protecting the consumer shouldn’t mean that we are continually being burdened with additional regulation, most of which actually doesn’t help the consumer at all. It’s not a coincidence that so many advisors have left the industry, costs have sky rocketed and FASEA (that the AIOFP was also against and proven correct) disbanded. JAWG is acting like a consumer advocacy group not an association that is supposed to be supporting advisors.
Possibly the only thing “proven” is a poor understanding of the outcome of the QAR. Allowing super funds the ability to operate like the wolf of wall street is in whose interest?
So how much will members be charged for better advice?
I think you need to go back and read the initial set of draft recommendations. They will send the industry in the opposite direction to what you advocate. Product sold by Product Manufacturers, who determine their own education and standards and are free to self regulate. Whilst not falling under any ASIC oversight.
“Churning of insurance” . Another report from ASIC was it?
I still want to know who churns … these days its almost impossible to get a policy that covers the client properly…. who the hell would want to do this regularly- every insurer has told me they know who churns so if the issue is such a problem speak to the insurer and go see those advisers…. most of the stuff they take years to review are just a joke….. super funds and banks win again and again and again…. watch them enter the space again after we all are gone…. nothing will change