According to Peter Johnston, the executive director of the Association of Independently Owned Financial Professionals (AIOFP), the association’s member survey has found the five most pressing issues its members want addressed by Canberra.
The survey’s results found that getting consent forms, fee disclosure statements (FDS), and annual opt-in forms abolished was the topmost issue among its member base.
This was followed by a request to allow advisers to use professional judgement on the size and content of a compulsory financial advice document to clients.
Next was adjusting FASEA exam content to be relevant and specific to an adviser’s skills, while a request to have the Australian Securities and Investments Commission (ASIC) levy assessed by an independent party came in fourth, alongside making advice fees tax-deductible. In number five was “risk commissions to be returned to pre-LIF levels”.
The AIOFP is also commissioning a survey of consumers with CoreData to assess where they get political and financial opinions from ahead of the next federal election.
Mr Johnston put the focus on the lobbying power of medical associations: “We think the traditional view of family doctors and pharmacists influencing political outcomes is outdated and inaccurate … ‘when was the last time you discussed politics with your doctor?’”
This is an issue that Mr Johnston raised on the ifa podcast last month, arguing that the power of doctors is based on flawed perceptions.
“Some of the biggest players within the industry, like the AMA, the Australian Medical Association, also the pharmaceutical groups, they are perceived to have an enormous amount of power with their consumers and therefore politicians are wary of them, they don’t want to get them offside. We think that’s flawed,” he told ifa.
“Now, I was an adviser for 20 years and I know exactly how much power we have with our clients on political and commercial matters. And that is a lot better than a doctor who is perceived to be a threat to politicians, because every family has got a doctor.
“But when is the last time you spoke to your doctor about any commercial or political matter? You never do, so really that’s a flawed view. And we think the politicians are just waking up that the advisers have a very strong relationship with their clients and they’re a threat.”
Next steps
The rest of the AIOFP’s political engagement strategy will involve financial advisers engaging with clients and putting the five key issues to politicians.
“Share this information with your clients to demonstrate how the politicians have caused the cost of advice to increase and they are paying for it,” Mr Johnston said, adding that engaging clients is “critical to this process”.
He also urged advisers to tell their clients that their fees could be “reduced by circa 50 per cent if the politicians comply with our demands”.
Stage three of the plan is to present the information to local federal members, while stage four includes taking the information to “key politicians” ahead of the AIOFP’s annual conference.
Stage five includes making it “very clear” advisers will become “active in marginal seats” leading into the next federal election if their needs are not met.
“We did it last time and we will do it again if pushed.”
This is in reference to what Mr Johnston called the AIOFP’s “Kooyong marginal seat strategy” on the ifa podcast. He said that advisers’ lobbying power was partially demonstrated during the 2022 federal election, where Treasurer Josh Frydenberg lost his seat.
“We had 280 advisers within the seat and they all had 200 clients each … who they can have direct influence on by telling them that the cost of advice has doubled because of Josh Frydenberg’s actions, and we need to send him a message,” he said.
“So, this is throwing a bit of a terror through Canberra when suddenly, all these politicians are realising that advisers have a lot of power, because we have a strong relationship with our clients.”
Mr Johnston has, on several occasions, reiterated this stance on the power of the advice profession to lobby government, telling ifa that the next federal election would be a “tightly fought affair with marginal seats playing a significant role in deciding who governs”.
“This is a perfect setting for the advice community to capitalise upon regardless of which association they prefer. The real power is in the hands of advisers who deal with their clients, that’s what intimidates politicians,” he said.
“We are almost halfway to the next election, a great time to start agitating for what we want then gradually ratcheting up the pressure over the next 12 months leading into May 2025.
“We have released our strategy for all advisers to follow if they agree with direction.”
In 5 years of AIOFP membership I have never been asked my views.
Did the survey go to all members or just Peter Johnson?
Because if it went to all, I’d be surprised if the government’s ASIC tax and CSOLR fees are not considered problems for the membership.
We advisers are busy enough dealing with unnecessary compliance hurdles, inter alia. Perhaps, we would be better served if our representative bodies did a better job instead of shifting the responsibility to us.
All brilliant initiatives
As professional financial advisers, we should refrain from sharing our political preferences with prospects / clients. Not only will this alienate some people, it is not within our scope and an unprofessional look for all of us.
Any self-respecting adviser should refrain from following Mr. Johnston’s advice re: “fees dropping by circa 50%” – there is no substance to this.
“”fees dropping by circa 50%” – there is no substance to this.”
Are you joking?????
My gut feel is your not a Financial Planner and Mt Johnston is on the money – your comment confirms this in my mind. Thanks
Thank you Peter for never giving up and always trying to make things better for us advisers who have always come out as the whipping boys for some reason.
My thoughts precisely around advisers having more influence than doctors etc. Clients are always talking to me about government decisions mainly around Centrelink Pensions and Super changes.
It is interesting to see that the highest priorities for AIOFP members are being delivered by the QAR reforms. The AIOFP was of course very opinionated on the QAR, stating in February this year that they were opposed to it from the start. Obviously they were not listening to their members at the time. Hopefully they have come to their senses now and will be more rational in their advocacy positions in the future.
It is also interesting to see that the AIOFP have become a consumer advocate, arguing for advisers to cut their fees by 50%. Who believes this is possible and who would support it? Let’s see what happens with the implementation of these reforms before we start offering money back to clients. Time to bolt the cannons to the deck!
“It is interesting to see that the highest priorities for AIOFP members are being delivered by the QAR reforms. The AIOFP was of course very opinionated on the QAR, stating in February this year that they were opposed to it from the start”
There is more than one part to QAR. Your statement seems to assume that liking one part means you like it all – or it was a good idea to start with.
“We had 280 advisers within the seat and they all had 200 clients each … who they can have direct influence on by telling them that the cost of advice has doubled because of Josh Frydenberg’s actions, and we need to send him a message,” he said. Goodbye Albo, goodbye Jones, – too little too slow too late – bring on the next election I say.