As the election draws closer, stakeholders nationwide are ramping up their advocacy efforts in attempts to influence votes, and advice is no exception.
In a letter to members, the Association of Independently Owned Financial Professionals (AIOFP) has made its clearest cut statement yet, throwing its support behind the Coalition and shadow financial services minister Luke Howarth.
It’s a stark contrast to the scene just three years ago before the previous federal election, which saw the AIOFP back Labor and Stephen Jones as a much-needed replacement for the former government.
The Financial Services Minister sought to remind advisers of just how bad the Coalition had been for advice when he announced education reforms last week, saying the “advice industry was abandoned and decimated by the former Coalition government, as the number of advisers fell from 28,000 in January 2019 to less than 16,000”.
While many within advice would agree with Jones’ sentiment, that he has almost universally lost support from the profession is indicative of the lack of action during his three years as minister.
“There is no sugar coating the last 3 years under Minister Jones, it has been bitterly disappointing except for the 10-year rule legislation,” AIOFP executive director Peter Johnston said.
“The minister’s two fundamental mistakes were allowing his office to be captured by the Treasury bureaucrats as his key staff from the outset and giving too much respect to the QAR process by allowing [Michelle] Levy to complete the final report.
“We think QAR was half right and the rest flawed, it literally wasted three years of debate and pontification with further risk compliance initiated by the minister, with the ridiculous CSLR developments, the ‘hot mess’ just got hotter and out of control.”
With the minister announcing he would retire from politics and not contest the next election – something Johnston speculated could be because he “was informed his future role was on the back bench” – it is unclear who would take his place if Labor was returned to government.
Regardless of who would step into the portfolio, Johnston said the minister’s office confirmed it would not commit to the AIOFP’s “demands” for eliminating consent forms, returning risk advice to pre-LIF conditions, removing Dixon from CSLR and holding product manufacturers accountable for their own product failure, and allowing adviser professional judgement when constructing a financial plan.
“Great credit however should go to the Liberal Party for acknowledging that they got it wrong with our industry during the 2014 – 2022 period and are prepared to undo the pain which they inflicted,” he added.
“Considering our members voted unanimously in favour of shadow [minister] Howarth’s presentation at our Canberra conference over Minister Jones’ address, the AIOFP has no choice but to recommend our members and the wider advice community to politically support the Coalition government at the upcoming federal election.
“It is time to demonstrate the political power of Advisers and their clients to Canberra.”
According to Johnston, a minority government would be “disastrous” for the advice community, as the likely result would be reliance on the Greens or Teal independents.
“The left-wing tendencies of both groups will be a threat to undoing the compliance ‘mess’ and the risk commission issue,” he said.
“It should be noted that a recent analysis of voting patterns over the past three years showed that the Teals all voted with the Greens on at least 75 per cent and some over 90 per cent of the time. These small opportunist groups have no choice but to be very selfish by nature, they will literally do anything to be politically relevant.”
Johnston also reiterated the AIOFP’s calls for advisers to push against the Compensation Scheme of Last Resort’s (CSLR) cost blowout and inform clients directly about the “frightening future liabilities” advisers face.
“A viable strategy can be to tell them who NOT TO VOTE FOR as opposed to the alternative. Putting the least desired candidate last on the ballot form will be effective,” he said.
“As previously disclosed, our political strategy will involve supporting marginal seat and Teal-affected Liberal seat candidates with full disclosure on activity at the AIOFP AGM and approved by the AIOFP board.”
The AIOFP has not been alone in pursuing a marginal seat strategy ahead of the election, with Financial Advice Association Australia (FAAA) chief executive Sarah Abood previously noting the upcoming federal election is “looming large” and the body is focusing on refining its strategy.
According to Abood, the FAAA is looking into how it 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 need a real focus, not just on the Coalition and Labor, but of course the Teals, the Greens, and independents that will have most likely a very big impact on what policies the next Parliament is able to implement.”
I read a lot of Advisers blaming the previous government (Liberals) for past mistakes. Let’s remember if a Government calls for consultation and your Industry Associations put forward recommendations, then the Government who ever they are, are highly likely to adopt those measures. Advisers need to have a good hard look at those Wolves in Sheep clothing purporting to Advocate on their behalf. Those Wolves range from your licencee with a vested interest or a former FPA for example putting forward to FASEA that a Bachelor of Business Degree is merely worth 20 points.
The AIOFP tends to support whichever party provides a Guest Speaker at their annual conference. However I cannot fault their logic nor their determination to get a good outcome for Advisers. They’re doing a lot more for Advisers than the FAAA ever did in the last 30 years, and I take my hat off to them. Sadly that says more about the hapless FAAA and their delusional belief that their future is with AwareSuper et al.
Any party that seeks to adopt a term called Qualified Advisers and thinks backpackers on a working holiday visa is the solution to financial advice needs to go.
Bye Bye Mr Jones don’t let the door smack you in the ass as you leave. Typical of ministers in this role stuff it up, stuff it up some more then blame Advisers for illegal act prompting tougher legislation BUT wait the big boys in town [industry funds] hardly get a mention. One of things we need to do is change from and ‘Industry’ and start being a ‘Profession’ we need to be known as professionals and not just a highly paid [ha] industry producer. Just imagine if we started calling solicitors industry providers there would be hell to pay! Imagine attacking the legal profession and saying ‘Oh someone with half the knowledge of a solicitor can give partial legal advice for free or at least at a lower rate!’ Cumon guys we need to stand up to the powers that be reduced numbers yes but we do possess some of the strongest free minded members in this profession. Until we get a say at the table things will continue to be swung to reduce this profession even further. It started with that other bloke Shorten who is also leaving the sinking ship he started and Jones just carried the same torch. I have been in this profession for over 30 years and I have seen a reduction in fees, commissions and benefits yet we still have these so called experts who know whats best for OUR clients Give me a break!!
Most Advisers are licensed via large insto’s that invariably have a vested interest in making financial services laws complex for the adviser, some even have a link to a product such as an in-house MDA etc. We will never have a voice whilst we outsource it to an AFSL with a conflicted interest.
As a experienced adviser (with an accountancy degree that the LIBS WOULD NOT RECOGNIZE) I was saved by Stephen Jones and let down badly by Sen Jane Hume and her Morrison cronies. She needs to be removed as part of the bad old guard and only then the Advisers may get a better run under the libs.
You’re degree was not recognized by FASEA, the Liberals had nothing to do with it. The Liberals and both sides of parliament, merely gave FASEA the power and authority to determine a meaning of a degree. That meaning could have been an Accounting Degree. FASEA adopted recommendations put forward by your industry representatives namely the FPA which recommended your Accounting Degree was worth 20 points out of 100.
Say what you like about the AIOFP.
My opinion as a financial adviser is:
– ALP is rubbish with no plan to be less rubbish (mates first, advisers last)
– Empowered Teals will likely be rubbish
– Empowered Greens would likely be utterly appalling
LNP has been rubbish, but at least Howarth accepts that with the view to improve things for the professional adviser community.
I’ll be voting LNP first and Greens last.
I am with the AIOFP – we have to work with what we have not what we would like in terms of politicians/political parties.
Perhaps the AIOFP can put out a letter detailing the reasons- increase in cost – adviser levy, CSLR etc, which advisers can then =send to their clients who are also feeling the pain. I certainly will send this to my clients.
Me too
Does the AIOFP also support the Libs’ election policy allowing people to access their super to buy their first home?
Poor younger generation, start out life with HECS debt then day one of work, 11.5% of earning taken – again, for their own good? No wonder they find it hard?
Some advisers in AIOFP strongly support this, but there’s no official policy position on it. It will happen regardless of what advisers think.
Let’s just face the stark fact.
Whilst the Liberal’s showed no allegiance, support or consideration for Financial Advisers for nearly a decade, it will NEVER be a situation that a Labor Govt will EVER put themselves in a position to really support the needs of advisers as it is simply against their ingrained ideology.
As much as we thought that Labor may have changed their spots, it was a case that Financial Advisers were so battered, so desperate, so disheartened and disappointed with the treatment by the Liberals, that they were prepared to give the other side a chance.
It was a failure and we now know that for all the years we knew the Labor Party philosophy was not supportive of IFA’s, we now must trust Liberal ( without Morrison, Frydenberg, O’Dwyer etc) to acknowledge their grave mistakes made and make good by listening and acting in the best interests of Financial Advisers.
The LNP will listen and act in the best interest of the Banks and Life Co’s.
Neither party or any bureaucrat gives two hoots about Financial Advisers.
I am not sure if Canberra (all political parties) can undo any of “the pain which they inflicted”.
What a joke of a position to take. The AIOFP reveal itself to be nothing more than another partisan organisation, looking to unwind everything that came out of the Royal Commission the Liberal party so desperately opposed.
The hypocrisy of saying “Great credit however should go to the Liberal Party for acknowledging that they got it wrong with our industry during the 2014 – 2022 period and are prepared to undo the pain which they inflicted” is absolutely mind boggling.
So the Labor party widely consults, has an in-depth independent review completed, and then tries to work with all across Government and industry to implement change in a comprising manner and AIOFP do nothing but complain, and then state they want to go back to the very party and has all but destroyed the reputation and future of this industry with such blatant disregard and neglect. Simply staggering.
ALP & Jonesy only made the HOT MESS, Hotter.
Lots of talk and so little action.
Govt theft of triple ASIC Levy & the insane CSLR.
Michelle Levy (a Labor supporter) never consulted the AIOFP. But we weren’t covering her meal ticket either.
Okay, I get it– The AIOFP is looking for bang for buck, and picking winners
But those of us who have watched politics for a while, and the historical political attitudes around financial advice (heavily influenced by ASIC and Treasury) have seen this movie before.
As is as is stated above, in 2022 Minister Jones was making all the right noises, but with miles of built-in wriggle room. Anyone with any concept of the links between industry super and a labor government should have understood what would happen once Mr Jones was sworn in.The industry super funds directly and indirectly are now the biggest sponsors of labor, and we only know some of the ways they are directing those funds to election funding.
On the other side, we just had a decade of the Coalition listening only to its big donors – four banks(around $1 million each directly) and insurance companies. Frydenberg for example was well known not to want to talk to the ALA, particularly about LIF, Preferring to listen to the FSC, then heavily sponsored by the banks.
We all know LIF was a bank sponsored idea to make their up-for-sale life offices look a better deal than normal, purely by saying to the prospective overseas buyers that LIF had cut distribution costs by 50%.What a bargain. The banks of course were smart enough to associate LIF with ASIC Report 413, which erroneously alleged massive commission driven “churning” but never actually defined what churning was
So now we have Mr Dutton wanting to get elected and frankly, like Mr Jones in 2022, his official spokesman on financial services (Howath) is making all the noises he thinks the industry wants to hear.
BUT, Mr Howarth for example is very cool on whether or not to reinstate life risk commissions to their pre- LIF level ,and no doubt ASIC will be in his pocket if he is elected. But the coalition has two spokesman, the second being Andrew Bragg, whose main focus appears to be undertaking the industry funds and the membership of the various boards, with some justification, but I’m yet to hear him say that a new coalition Minister for Financial Services will abolish LIF, and give vital last-minute resuscitation to the life insurance industry, which is dying as we watch.
The facts advisers as voters have a real dilemma – whose bedroom promises do we believe. Both parties have now a proven crap record and that cannot be ignored.
Bert Van Manen has come out very strongly to increase risk commissions this week.
I don’t get this comment “Great credit however should go to the Liberal Party for acknowledging that they got it wrong with our industry during the 2014 – 2022 period and are prepared to undo the pain which they inflicted”
All I have seen is deep silence on who was responsible the great pain inflicted by the Libs, but lots of noise on why Labor is at fault for not fixing it. The depth of hypocrisy is staggering. But Labor might even be worse than the Libs.
I don’t see any good outcomes – just a question of bad or really bad.
“I hear you” and “we get that”
(how did that turn out, Jonesy?)
Disappointing that the only option in this country is a choice between two incompetent parties.
Keep up the good work Peter, Robbie Bennetts
A vote for a teal is a vote for Labor.
Don’t risk it guys.