Many in the industry are angry and distressed over the impact of continuous waves of regulatory change on their businesses and lives. But handing a protest vote at the coming election to a traditionally anti-business party – and the architects of FOFA – may also be a tall order.
The launch of a campaign against a sitting Coalition MP in a Victorian marginal electorate by the AIOFP this week generated significant discussion among ifa readers.
The announcement that the adviser association would mobilise around 200 advisers representing as many as 36,000 clients in the seat of Casey to vote against Speaker of the House Tim Casey at the federal election – which could come as soon as August – is expected to be the first of several marginal seat plays in protest at over-regulation of the advice sector.
Debate among our readers was varied, with some suggesting the industry was better off sticking with the devil they knew in the Coalition, others indicating they may give Labor a chance given they couldn’t do worse than the incumbent party, and others still insisting the campaign was unnecessary and advisers needed to face the current regulatory environment.
The announcement of the campaign comes as the industry appears to be finally making incremental progress in persuading some in the government and regulators to undo some of the barrage of regulations that has plagued the sector for the past several years.
The scrapping of FASEA and ASIC’s affordable advice consultation are positive signs that there may be a realisation the pendulum has swung too far in favour of regulation following the scandals at the royal commission, which have made punishing the financial services sector an incredibly politically attractive proposition in recent years.
At the same time, the federal opposition also appears to be zeroing in on adviser discontent and realising there could be at least a small number of votes in it for them.
Labor’s financial services spokesman Stephen Jones has done a reasonable job at recent industry functions to take on board industry concerns about over-regulation, the lack of recognition of adviser experience and specialist degrees in the FASEA education framework, and even addressing the danger of vertical integration within the industry fund space.
However, a key challenge for an anti-Coalition campaign to overcome will be the traditional prejudices of the financial services industry, and the business community, against Labor.
While there’s arguably not much difference between the parties as they’ve both moved closer to the centre for political expediency, advisers have not forgotten that the Labor-constructed FOFA regime was what kicked off the anti-adviser wave that the Coalition are now merely surfing on.
In line with those sentiments, Mr Jones has stated his opposition to retaining any commissions in the risk advice sector, while also commenting at the recent AIA Adviser Summit that “we’re not going to go back to the problems exposed by Hayne – you won’t find anyone that’s willing to stick their hand up and say that’s a viable option for the industry, because it’s not”.
This highlights the issue for the advice sector when it comes to political engagement at the moment – while parliamentarians are willing to listen to the industry’s concerns to some extent, the stench of the royal commission is still so toxic that most still seem to be deathly afraid of being labelled ‘anti-consumer’ if they are seen as ‘pro-adviser’.
This is why, while many are angry at the current state of things under the Coalition, there appears to be no natural alternative party they can side with. It remains to be seen whether this situation can be improved through better engagement and education with all sides of politics, which to their credit the associations seem to be getting better at.
Still, some in the industry may prefer a ‘wait and see’ approach with the outcomes of ASIC’s consultation, and the transition of FASEA’s powers to Treasury, still up in the air. For others, the crippling impact of the current regulatory environment may drive them to take constructive action at the ballot box.
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