Ball in minister’s court ahead of upcoming election: AIOFP

Financial Services Minister Stephen Jones needs to keep up with his opposite number to receive adviser support, according to the Association of Independently Owned Financial Professionals (AIOFP).

In a note to members, AIOFP executive director Peter Johnston said there are four key issues shadow minister Luke Howarth backed that Minister Jones will also need to support, namely, eliminating Dixon Advisory from the Compensation Scheme of Last Resort (CSLR), removing consent and opt-in forms, returning to pre-LIF conditions for risk advice, and allowing advisers to use professional judgement.

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These represent four of what the AIOFP previously termed its “10 Commandments” wish list of policy amendments.

According to Johnston, how the minister responds to these issues will “assist our decision-making process on who the AIOFP will be supporting” in the upcoming election, adding that the “ball is firmly in [Jones’] court”.

The AIOFP also said it would seek “member financial support” to assist its strategies by the end of January, and that members would receive a strategy paper to consider before participation.

It forms part of what Johnston termed the association’s “swinging voter” political position, which he has previously described as the AIOFP’s vote being “for lease, not sale”.

“Our support cannot be ‘bought’ but leased to the political party that acts in the best interests of our members,” he said.

“We have made it quite clear that if the selected party then acts against our members, we will change our position accordingly.

“The concept of the ‘swinging voter’ is aligned with the dramatic drop in the primary vote of the ALP and Liberal parties over the decades where their status is at historic lows of 32.6 per cent and 23.9 per cent, respectively, at the 2022 election [the addition of the LNP/Nationals primary vote increases the Coalition primary vote to 35.5 per cent]. This has played out with the largest independent/minor party crossbench in the lower house after the 2022 election results since 1934.

“The concept of having ‘welded on supporters who blindly vote’ regardless of the quality or relevance of policies is diminishing.”

Johnston also argued that the growing “disillusionment” with politicians presents an opportunity for advisers and their clients to have a “powerful voice” in Canberra

“It demonstrates the likely propensity of consumers to change their political allegiance if the policies directly affect them, an attitude politicians are petrified about,” he said.

Johnston added: “The esoteric feature of the AIOFP that allows our stance is we only have one faction of members to represent – financial advisers – we are not trying to please or represent institutions, superannuation funds or consumers groups.”

The AIOFP also cited a research paper titled 2022 Federal Election from Dr Jill Sheppard, a lecturer in the Australian National University’s School of Politics and International Relations, which found a combined expenditure across the 2019-22 election cycle of more than $600 million from just the three largest spenders – the Coalition, the ALP, and the United Australia Party.

Acknowledging that the advice community “cannot compete with this expenditure”, Johnston argued, “What we have is what these political parties are striving for – loyal clients who will take notice of financial and political direction and suggestions.

“This is our sector’s overwhelming political advantage, we need to use it wherever possible to get the best outcome for advisers and their clients.

“Politicians are now understanding the political clout we have with around 1.8 million consumers who are clients of 12,000 advisers, especially in the marginal seats that will decide the election outcome.”

It’s not just the AIOFP that has put a focus on member engagement in an election campaign, with Financial Advice Association Australia (FAAA) chief executive Sarah Abood outlining in a webinar in December that the FAAA wants to engage with not only both major parties, but “critically” the crossbench MPs around “policies in our area, and the really critical things that our profession needs to see in order to better help consumers”.

“We saw the success of member involvement in CSLR, and there’s no doubt that it had a huge impact. So, we are looking at that and that will be something that we’ll be communicating with [members] early in the new year, and probably looking to get expressions of interest from those that would like to be directly involved, and what would that mean?” she said on the webinar.

“In part, it would be letter writing again, but also literally meetings with your local [candidates]. They’re really important. Our members are running really great small businesses, pretty much in every electorate around the country. The strategy is around looking at other particular electorates where we really want to make more impact. Are there ones that are contestable, that we think there could be a high chance of a change of member in that seat.”