“We are yet to witness any adviser who agrees with the proposal. Unless the adviser community can get an original ‘unedited’ version of the ministerial submission, we can only assume that the three Associations ignored the adviser feedback and placed the interests of the Institutions well ahead the advisers,” AIOFP chief executive Peter Johnston said.
“This ‘mushroom treatment’ must stop – they are playing political games with advisers, their families’ lives and the industry.”
Mr Johnston questioned whether independent advisers should continue to let other associations “represent you with Government and Regulators on critical issues”.
These comments come after the FPA said yesterday that it continues to fight for a “sensible interpretation” of the Life Insurance Framework, including the controversial clawback provisions, despite failing to secure every recommendation in its Life Insurance Blueprint.
Before coming to the table to negotiate, the FPA said it consulted with its 11,000 members on a life insurance blueprint which “outlined a competitive and sustainable solution for the industry”, the FPA said in a statement.
“Specifically, the FPA consulted with members on a hybrid system that would allow commissions, with an upfront payment capped at four times the ongoing commission payment”, the statement said.
“This served to protect consumers from paying high fees by addressing remuneration.”
Last week AIOFP released its own life insurance commission submission, which demanded changes to the LIF proposals.
“The major difference with our proposal on the clawback provision is that advisers are recognised for their time and expense with sourcing and managing the client to the life office, it is unfair to only penalise an adviser if a client cancels due to circumstances out of their control,” he said.
“The FPA, AFA, FSC proposal puts the entire burden, cost and blame on the adviser regardless of the mitigating circumstances – this is totally unfair and greatly favours the institutions.”
Mr Johnston said the AIOFP had been monitoring the progress over the past nine months and met with the Assistant Treasurer Josh Frydenberg six months ago about the association’s views.
“We believe we were locked out of the association negotiations because we would have been there representing the best interests of the advisers not the Institutions, something this ‘little exclusive party’ apparently did not want,” Mr Johnston said.
The AFA has also clarified its position on the clawback provisions.
This week, AFA chief executive Brad Fox said the three-year retention period is a “blunt instrument” but has strong government support as a measure to deal with inappropriate product replacement.
#3 have you ever heard of a union putting their hand up and saying your right our members should take a 50% pay cut and give it back if the client cancels with in three years.
When the outcomes advantage one side so heavily with the other as a willing participant it would be reasonable to question the intentions.
Simple question. Does AFA receive any sponsorship money from insurance companies? Or does conflicted remuneration only apply to Advisers not doing the best thing by their clients.
Now the govt can rubber stamp It and wash their hands of any responsibility. What do you mean people are underinsured? What do you mean competition is reduced? You agreed to it!
The AOIFP are coming across as very unprofessional and petulant.
For starters – they are VERY vocal now AFTER the fact. They did very little previously, just put forth some basic statements but did not get involved in any meaningful manner with serious submissions or discussions.
“we can only assume that the three Associations ignored the adviser feedback and placed the interests of the Institutions well ahead the advisers,” AIOFP chief executive Peter Johnston said”
They tried and failed, so he outright lies and says they deliberately failed and betrayed advisers.
“We believe we were locked out of the association negotiations because we would have been there representing the best interests of the advisers not the Institutions, something this ‘little exclusive party’ apparently did not want,” Peter Johnston said.
Grow up Peter, that is the most childish and unprofessional statement to make.
As for the AFA and FPA proposal devised to blame and hurt the adviser – Just no. Their proposals were not to that effect – they both fought to help advisers, but failed against the might of the providers, the FSC and Coalition interests. They actually fought for us – moreso than the AIOFP did. Yep, they failed miserably, but at least they genuinely tried.
For the record – I searched AIOFP’s site, and could not find their comprehensive white paper / proposal on THEIR proposals for this issue.
All they have done is ‘monitor’it, have one meeting with Frydenberg, and now are barking like a small dog and making outrageous statements in order to market themselves as caring about advisers (despite doing so very little when it mattered). They just see the whole issue as a chance to make false statements against the FPA and AFA to try and build their membership base with any advisers believe their propaganda and don’t objectively look at AIOFP’s actions.
“The FPA, AFA, FSC proposal puts the entire burden, cost and blame on the adviser regardless of the mitigating circumstances, this is totally unfair and greatly favours the institutions.”
This was the intention from the start, this is all about profit and the most profit will be derived from driving outt IFA’s and force clients to conflicted bank advisers and direct insurers.
Conflicted, corrupt and surely illegal this entire farce stinks. Thanks for the noise Peter, too bad AFA just rolled over…
Every adviser in the country knows these changes will hurt independent advisers. Some will seek to capitalise on the pain of others, by standing on their soapbox and pushing their fee only service. But the risk specialists, most of whom do a very good job and don’t get the respect they deserve, will be devastated by these changes. Especially new entrants. The end result will be more conflicted advice from the product providers themselves. This is what they want and it is the worst possible outcome for the Australian public. It is outrageous that ASIC and the ACCC have stood by and allowed the product providers to gang up and bully independent financial planners in this manner. By allowing such behaviour it sets a very bad precedent and with fewer independents around, the product providers won’t care about us. Why bother with quality products and competitive prices if independents become a small, insignificant part of the market? Congratulations to the AIOFP for being the only association who is actually supporting independent advice in this country.