The Association of Independently Owned Financial Professionals (AIOFP) has once again argued that a tight race in the upcoming federal election is a positive for the advice community, with executive director Peter Johnston telling members now is the time to push the agenda to all sides of politics.
In a letter to members, Johnston said the association would present its reform platform – which he dubbed its “10 Commandments” – to a range of MPs at a dinner at Parliament House next Monday followed by both Financial Services Minister Stephen Jones and shadow minister Luke Howarth the following night.
“With the USA Trump victory and the left-wing Anthony Albanese government under considerable political pressure thanks to many ‘home goals’, the next federal election will be very close – a great outcome for the advice community and consumers,” he said.
“This environment provides the perfect opportunity to present our ‘10 Commandments’ wish list of policy adjustments/amendments to all sides of politics and assess who will support our position. This is the most opportune time in the political cycle that ‘subtle’ intimidation has the best chance of success.”
The list of priorities cover a range of issues that have caused unrest among the advice profession, with many contributing to the increasing cost of providing advice:
- Remove Dixon Advisory out of the Compensation Scheme of Last Resort (CSLR) process.
- Eliminate the ASIC adviser levy.
- Eliminate annual fee consent forms.
- Eliminate client annual opt-in forms.
- Return risk market structure back to pre-LIF conditions.
- Reject the Division 296 $3 million super tax legislation.
- Reinstate Reduced Input Tax Credit (RITC) conditions.
- Advice to become tax deductible for consumers.
- Statement of advice (SOA) rationalisation.
- Recognising the professional judgement of advisers.
Liberal MP and former adviser Bert van Manen, who recently introduced a private member’s bill aimed at simplifying the financial advice process that Johnston said can “educate all politicians on why the cost of advice is too high and what can be done to reduce it”, will address the Monday dinner.
“Our objective is to get the politicians to then pressure their ‘head office’ to support our position, we hope they will conclude that they want the advice community and their clients with them rather than against them,” he said.
During the Tuesday dinner event, both Jones and Howarth will address AIOFP members, with Johnston noting both will receive the “wish list of policy adjustments/outcomes” and be given the opportunity to respond.
“The minister and shadow will be asked to provide a simple yes or no response to each of the 10 demands, which will allow us to establish a ‘score card outcome’ to determine who we will support,” Johnston said.
He added: “Make no mistake about it, all sides of politics have commenced their election campaign and we need to exploit the opportunity to protect consumers and our profession going forward or wait for another three years to get listened to.”
1. Seperate advice and product.
The Financial Advice Board of Australia (FABA) to take responsibility for ensuring all financial advisers are suitably trained, qualified and safe to practise. All advisers to be independent from product providers.
The FABA board to be made up of 80% financial advisers.
FABA to be funded 100% through adviser fees.
FABA to oversee the rules and regs currently overseen by ASIC.
2. Keep CSLR but have two streams:
a. funded by product providers. Where issue was through advisers recommending in-house products.
b. funded by financial advisers. Where issue was through poor financial advice not related to recommending in-house products.
Well this would certainly be the ideal set up. Astounding that no association, pollie, or industry leader ever promotes this idea. One of the best things under this idea would be compliance is streamlined under one body (FABA) for all advisers, to operate on the same page. Leaving compliance to be interpreted by 1,000 different lawyers, who are only interested in protecting the licensee creates a lot of the mess we see today. It would certainly be easy for one governing body to create a standardised fee consent form!
Mr/Ms Yeah Nah, that’s exactly what we want to happen, one side agrees to certain conditions and the other matches it, it’s termed a bipartisan outcome….that’s precisely how we got the Education Pathways/10 year rule up with Shadow Jones proposing it at our conference leading into the 2022 election and a politically desperate Minister Hume matching it.
The only time to get this outcome is leading into an election when they are all ‘singing for their supper’ and that time is well and truly with us……that’s why we are in Canberra and not QLD.
It is post dessert at dinner probably with drinks having flowed freely so you should be knees deep in promises (to be broken) by now Peter…!
11. Get rid of the AFSL regime for professional advisers! Leave AFSL’s for the product advisers.
100% agree. And, make sure the professional advisers are professionally qualified and then, allow us to practice like our fellow professional accountants. Will this make advice readily available and cost-efficient? Will this render AFSLs redundant? Will the client be better off?
Agree. So simple, yet so hard for Government to understand.
Let’s
Make
Financial
Advice
Great
Again
The AIOFP representatives should wear hats with LMFAGA to the dinner…
A simple “Yes or No” answer to each question from a politician? Good luck with that! Jones will over promise and under deliver as usual. I bet he says Yes to all 10 then delivers nothing as he has proven to be a man full of words but no actions… Your best bet would be for the oppo pollie to say YES to all 10 then hope he actions some if his party gets in because old mate Jones will only tell you what you want to hear (again) before reporting back to his puppet masters at the ISN…
Jones prefers to stand up and parrot “I hear you” and “we get that” before sitting back down, on his hands.
A reasonable agenda but there are two items that have nothing to do with advice reform and are totally out of place.
#6 is about the proposed introduction of a new super tax that impacts less than 1% of the population.
#7 is about reinstating a silly tax loophole that never should have existed in the first place.
Advice associations should stay well clear of lobbying on tax issues like these. It dilutes focus, and reduces credibility.
#6 is an assault on common sense. Financial Advice should hopefully have common sense as one of it’s main pillars to uphold for clients. Tax intersects logically with financial advice
except the lack of indexation will rapidly increase that impact over time. It’s worth fighting.
#6 covers lots of small business owners and farmers, who may be required to sell their business premises/farm in years where income is low. Not a great outcome I think you would agree.
I agree it’s not a great outcome. But I reiterate it’s not an advice reform issue.
Part of the reason for FAAA’s ineffectiveness is being too distracted and diluted in their lobbying, by issues that are not core to advice reform. AIOFP is making the same mistake.
Let the small business and farmers assoications fight their own fights on tax issues.
Advice associations should be 1000% focused on advice reform issues, and nothing else.
11. Eliminate conflicted relationships between political parties and product providers.
Even though I am not an AIOFP member I have to commend Peter Johnstone. He is always looking out for our backs and not afraid to leverage off political weaknesses. Look forward to seeing the scorecard from the Tuesday Dinner. The first 2 commandments are a must as these buffoons are driving our costs through the roof with a stroke of their ill-informed pens. They wouldn’t know what goes on in the real world if they fell over it. Go for the jugular Peter.
100% agree with AIOFP. Well done!!!
Even though I am not an AIOFP member I have to commend Peter Johnstone on his integrity and courage…I would bother about # 6 though as there are enough powerful people who can fight their own corner on this.
Imagine how well served the PUBLIC would be if all of that happened.
It is objectively obvious that ALL of those things should happen.
The bots down in Canberra are positively useless.
Go, Peter.
It’s amazing what happens to the vermin when you shine a torch and apply disinfectant called “votes”
Can you put some things on the agenda we don’t want but ask for anyway so they feel they have some wins? All of the above is a must have! I can’t believe how wrong they have gotten things.
Let’s add “act with integrity” – they’ll hate that.