Why can’t the advice bodies get their act together?
The major bodies representing the Australian accounting profession recently united in calling for a more efficient regulatory framework for advice, which makes you wonder why the equivalent financial planning bodies haven’t been able to do the same.
It was the first show of solidarity since the three accounting bodies – Chartered Accountants Australia and New Zealand, CPA Australia, and the Institute of Public Accountants – met formally in 2012.
Whether the joint lobbying effort will lead to a successful outcome for the accounting profession remains to be seen. But the mere fact that they are willing create a united front for the first time in seven years for the betterment of their profession highlights the lack of unity on a variety of policy fronts between the Association of Financial Advisers (AFA), the Financial Planning Association of Australia (FPA), the Association of Independently-Owned Financial Professionals (AIOFP), the Profession of Independent Financial Advisers (PIFA) and the United Financial Advisers Association (UFAA), among many others.
Earlier this year, the mortgage broking industry successfully lobbied the government to backflip on banning trail commissions on new loans as was originally recommended by the Hayne final report.
This lobbying success led one advice dealer group head to proclaim that the division has enabled the government to treat advisers “like fish in a barrel”.
To be fair, the AFA and the FPA have attempted in recent times to collaborate, whether that be around the extension of FASEA deadlines, forming a task force to better represent advisers about the future of life insurance or in attempting to self-regulate.
Unfortunately, the self-regulation efforts would eventually come to naught after the government gave the green light to a single advice disciplinary body, leading the AFA and FPA to abandon its proposed code monitoring body. But perhaps its biggest failure is the inability of the advice bodies to prevent the banning of grandfathered commissions in the same way the mortgage broking lobby prevented the trail commission ban.
That being said, it’s not all doom and gloom. Lifespan Financial Planning chief executive Eugene Ardino noted that a major part of the problem with lobbying in the past is that the government always dealt with the dealer groups that had the most advisers, which was always the major banks.
Now that the big four banks are abandoning financial advice, and with AMP having its own problems with its advisers, there is perhaps a unique opportunity emerging for the advice bodies to properly advocate on behalf of the interests of advisers without institutional influence.
But it must do so now and without hesitation. Given the current adviser exodus, the growing advice gap and the myriad regulatory changes transforming the industry, it is more important than ever that every group claiming to represent all or part of the financial planning profession should put whatever differences they have aside and lobby more effectively for advisers who are facing more professional and personal challenges than they ever have previously.
Former prime minister John Howard was noted for saying that disunity is death in politics. If the mortgage brokers and the accountants can unite for the common cause, surely the financial advisers can, too.
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