Appearing at a Senate committee last week, Joe Longo addressed “regulatory overload” within the sector, saying, “I am concerned about this sector. I think it’s really important that consumers have access to affordable advice, to financial services advice.”
Speaking to ifa, AIOFP executive director Peter Johnston laid out specifics that Mr Longo and ASIC can be doing to assist the industry.
“Whilst we applaud Joe Longo’s enthusiasm for his new role and recognition that our industry is grossly over compromised with compliance, we can only see two areas where he can assist to make a real difference,” Mr Johnston said.
“Our industry has been ‘highjacked’ by the legal fraternity scaring practices into implementing the highest level of compliance to any piece of advice to ‘keep safe’ from ASIC.
“A greater volume of compliance translates into more fees for lawyers. What we need ASIC to do is give practical guidance to practice directors on what content they expect in SoA’s to keep the volume and price of compliance down for consumers.
“The other valuable role for ASIC is to have ongoing dialogue with AFCA and the industry on their decision-making process to ensure continuity within the industry and lower PI costs.”
Mr Johnston added that there are more “badly needed” changes needed for the industry but can only be delivered by legislative amendments, which include:
• Aligning the time frame for completing the FASEA exam with the deadline for updating education qualifications.
• The opt-in to an ongoing service agreement be every three years.
• The commission rate for risk products be increased to 85 per cent upfront, 20 per cent ongoing and 12-month obligation period.
• Any adviser with minimum of 15 years’ experience in advice not require a degree to remain in the industry.
“We have become very cynical with the way this Government gives snippets of information about agreeing with controversial issues like risk commission/FASEA/LIF but it is all deferred until post-election,” Mr Johnston said.
“Unfortunately we don’t buy into this strategy, we think it carries more weight this side of the election.”
FPA have proven themselves to be a useless sack of you know what. aIOFP and Peter Johnston are the only association flying the flag for the industry and deserve our support.
This isn’t exactly helping. Special interest pleading.
I don’t think peter gets it as he completely misses the mark. the issue is that you cannot prevent AFSL’s from mandating the highest level of compliance. that’s their business. they are allowed to protect themselves.
Peter, can you please let me know why very few advisers used the ASIC endorsed ROA only instead of the SoA for withdrawing super during Covid?
advisers are the meat in the sandwich, we want to be able to provide advice to consumers in a compliant, efficient way, but we cannot because the dealer group structure prevents us from doing so effectively. by the time you fulfill everyone’s requirements it takes 4 days to 6 weeks to produce the SoA and a further 4 weeks to implement so total time to implement most (even simple advice) is 3 months.
if we were individually registered with the AFSL system dismantled where the advisers were themselves responsible with a PI scheme (and maybe this is where the government can come in as there is not a deep market for PI) then we could get rid of the duplication and advisers would actually be able to follow the requirements of the law without the overbearing paperwork and being beholden to the demands of the dealer group.
until the AFSL system is restructured and PI addressed it’s not achievable. the whole system needs an overhaul.
Thank you again Peter! You and the AIOFP have yet again set yourselves out from and above the completely useless FPA. Why is anyone still paying the FPA their annual membership fees? The 3 year could work. The changes to LIF of 85/20 could save the insurance sector too.
Why don’t politicians understand the simplicity of insurance???
….. [b]The larger the group/more lives insured, the more you spread the risks and the cheaper the average costs are to the individuals in the group![/b][u][/u] Insurance has been going the opposite way of this for the last 5 or more years.
It appears I will not be renewing my FPA membership this year as I have sourced an alternative through the AIOFP
Turn off the lights as you go Rob…Pity you didn’t leave after your CEO appeared at the Royal Commission. At least you’re leaving now..Well done. Finally realized you can’t compete with AwareSuper and that $100,000 cheque via the Professional Partner Program?
So you will no longer be holding yourself forward as a CFP from 1 July 2021 then?
https://fpa.com.au/find-a-planner/robert-coyte-cfp036596/