According to research firm CoreData’s Future of Advice report, the Association of Independently Owned Financial Professionals (AIOFP) has the highest satisfaction rating among associations, regulators, and the government.
Speaking with ifa, CoreData chief executive Dean Thomas explained that the research surveyed advisers across a range of topics, noting that all advisers were able to provide their opinion of association performance regardless of whether they are a member.
The survey found that 27 per cent of advisers surveyed were satisfied (scoring from 7–10) with the AIOFP, 50 per cent were neutral (4–6), and 23 per cent were dissatisfied (0–3). This averaged out to a score of five out of 10 across all advisers.
The Financial Advice Association Australia (FAAA) also outperformed the regulators and government, with 23 per cent of advisers satisfied with the association, 38 per cent neutral, and 39 per cent dissatisfied. Its overall satisfaction rating was 4.2 out of 10.
While CoreData did not differentiate between membership of associations, it did break the results down into cohorts based on growth ambitions.
“We have three cohorts in the survey. First are those that had strong growth plans, and those are defined as people that basically have documented plans for growth,” Thomas said.
“Then you have a cohort called general growth plan. That cohort of advisers, which makes up the bulk of that about 54 per cent of the survey sample, say, ‘Look, we plan to grow, but we haven’t got the strategy or documented plans for how we get there’.”
The third group of advisers are those looking to simply maintain, rather than grow their firm.
According to Thomas, the satisfaction for the associations varies depending on the adviser cohort, with the AIOFP having greater satisfaction among the maintain group and the FAAA rating better with the strong growth plan cohort.
“The FAAA for businesses with strong growth plans come out on top, it has 29 per cent satisfaction rate, as opposed to the AIOFP, which has a 20 per cent satisfaction rate for Australian plans,” he said.
“When you get to general growth plans and maintain, that number for the FAAA dropped dramatically. So, what that’s really saying to me is … potentially the different parts of advice market are aligning or associating themselves with those different industry bodies.”
Responding to the survey, AIOFP executive director Peter Johnston said the “homogeneous nature of its membership” and not sitting on the “political fence” were key factors.
“History has clearly shown that associations cannot serve more than one master, we have and always will act in the best interests of our adviser members and their clients. We are pleased the wider advice community is now coming to terms and now appreciating our conduct over the years,” Johnston said.
“Our political support is only on a ‘lease basis’, we are not for sale. We will always support political parties who support our members, if that means changing ‘teams’ at some point, then so be it.”
Government and regulators
Unlike the associations, there was essentially no difference in the way these different advice cohorts felt about the government’s performance.
“There are slight variations, but not enough to be able to say, ‘Oh, wow, that group is really happy with what the government bodies are doing’,” Thomas said.
Not only did the government rate just 2.3 out of 10 on average, an overwhelming majority of 71 per cent said they were dissatisfied with the government. Additionally, while 25 per cent were neutral, a mere 5 per cent of advisers surveyed said they were satisfied with the government.
“Look at it this way: ASIC had a dissatisfied rate of 59 per cent, so that was the second highest, but that’s the body that’s regulating the advisers,” Thomas said.
“And then when you consider, they’re probably thinking, ‘Well, they’re doing what they’re told to do, the government is the one that can actually make the changes’, and they’re just not doing enough in the space.
“Look how slow they’ve been with all of the implementation of the recommendations for the Quality of Advice Review. Then when they have gone down that path, it’s a piecemeal and it’s taken a long time, and then they’ve created these additional rules and obligations.”
As Thomas noted, the Australian Securities and Investments Commission (ASIC) did not fare much better than the government, with 8 per cent of advisers satisfied, 33 per cent neutral, and 59 per cent dissatisfied.
The prudential regulator fared better, with 11 per cent of advisers satisfied with the Australian Prudential Regulation Authority (APRA), 50 per cent neutral, and a relatively small 39 per cent expressing dissatisfaction.
Regulators should not be setting out to win a popularity contest, but like those who are the more familiar regulators, the police, they have to live in the community.
And therein lies the problem. The police do not decide Criminal policy and they do not draft legislation. They can bring matters to the attention of the lawmakers and seek clarification, if not alteration. But it’s always about the enforcement of the law within the intention of the lawmakers.
The best example is that recently police forces across Australia have decided that the legislation relating to car theft is not strong enough, in that the police can pull up a stolen car, but if they arrest the person at the steering wheel immediately before the car ceased motion, they have another set of proofs to meet before they can charge that perpetrator with car theft. It’s a work in progress
In adviser world, deep down advisers know there has to be an ASSIC, pulling up the really criminal activities of the 1% of advisers who don’t play the game in the best interests of their clients. But today’s ASIC is interventionist and apparently wants to be a big player in the world of developing financial services policy.
We still don’t know what their involvement was in CSLR and there was always a suspicion they were acting behind-the-scenes when the banks went to the Turnbull government and offered to set up an ethical standards for advice and even better offered to fund it to the tune of $11.5 million for its first three years of operation. It’s pretty clear to most observers that ASIC were heavily involved in influencing FASEA and the group of self-serving academics who pushed its development.
Now regulators should NOT allow their bias to influence their actions. But anyone with any experience in this industry knows that ASIC has long had a hatred against commission-based product sales. Commission was always anathema to the lawyers who were occupying desks in ASIC.
That bias was seized upon by the banks, always the smartest brains in the in the room, who developed LIF for their particular purposes, but were able to sell it to ASIC as consumer benefit. Coincidently, or otherwise, depending on your suspicions, LIF came immediately after ASIC Report 413, where ASIC apparently found evidence of Risk policy “churning” and used that as a justification for halving first-year commission for risk sales.
It mattered not that some years later as he was forced to admit, in response to persistent questioning in a PJC, that Report 413 never actually found evidence of SYSTEMIC CHURNING to any degree. No mia culpa was forthcoming
ASIC course will not accept responsibility in any way that LIF is the principal cause of the irrational behaviour that is occurring amongst our life insurance manufacturers. Faced with an adviser driven revolt against LIF, new business revenue halved by 50% on conservative estimates, draining the insurance pools of their much-needed inflows of new fresh healthy standard lives.
The result: 70% gouging increasesd on existing policyholders over the last five years. And now the dreaded Duration Based Pricing where some insurers are seeking to attract new business with an upfront discount of at least 25% which disappears rapidly from year to onwards much to the angst of policyholders who had changed insurers attracted by illusory savings.Who’s best interests benefits from that.
Is it any wonder that advisers no longer trust ASIC to be a sensible regulator, particularly when we have now become “litigation funders” for any frolic ASIC thinks should go off to a court by virtue of the ASIC levy
Chances of meaningful changes in ASICs attitude to advisers? Not likely, not while we have inattentive dumb ministers swallowing the BS line that comes out of our regulators
What you’re saying about no evidence about insurance churning is true, coz the below is very true….
ASIC should re-open the case and properly investigated the financial planner they crucified (lost their houses, savings and nearly lost his family and suffered significant distress through this experience until now) for alleged churning of insurance products. Through some bogus complaint regarding this financial planner, they alleged the financial planner churned insurance products and put his clients into an inferior product and claimed commissions from it (His superiors received the commissions as per factual evidence, not him). Executives & Staff that presented these evidences was severely manipulated.
Please see below some evidence:
an evidence was presented where allegedly this financial planner was cancelling & replacing insurance covers, low & behold a different financial planner name was clearly visible and was still practising at that time.
an evidence was presented 2 clients was allegedly disadvantaged. Low & Behold, not this financial planners clients at all!
an evidence was presented this financial planner received ongoing insurance commissions etc. Totally incorrect executives & his boss received all this, he was an employee.
an evidence was presented that a transfer form should’ve been used, however, this transfer form is for a completely different product & does not relate to the matter. The correct transfer form was only generated after this financial planner left to start his own practise.
an evidence was presented alleging it was only this financial planner that was doing it, however, it turns out its widespread. New Business department has provided a reference number on numerous occasions, which indicates, they are aware.
an evidence was presented (signed by an executive, who surprisingly resigned) stating this financial planner was given numerous formal warnings verbally or in writing. Low & behold after a thorough review by 3 independent experts (including an expert that this financial planner hired), there was NO formal warnings whether it be in writing & verbally during his tenure as an employee & few more facts have been discovered.
when this financial planner, decided to represent himself and asked for the 49 client files so he can thoroughly investigate, he has only received 20 client files, until now remaining 29 files have not been presented.
The points above was severely manipulated to make it look like this financial planner was a crook. Isn’t it a crime when an information given to ASIC is incorrect or better yet manipulated?
Turns out, this financial planner had no choice to represent himself at the AAT (no funds to hire a lawyer or barrister, spent $400k trying to prove this complaint was bogus). Proper evidence presented by this financial planner shows new life insurance products had more features and benefits and monthly premiums was “significantly” lower. This financial planner had no compliance breaches throughout his tenure with his coward employer, 100 plus good character references from the community and industry & had all the awards. When the truth started to surface, executives and including ASIC delegate who ruined this financial planner’s life, retired/resigned and employed somewhere else & ASIC stating after the truth being revealed a better outcome should’ve been “Retraining & monitoring this financial planner” (It would’ve save time & money going after the wrong person). ASIC has ruined this person’s life including his family (I am sure ASIC staff have families themselves) by clearly not investigating this matter thoroughly, they simply relied on manipulated materials provided to them. ASIC need to take accountability for these significant errors & apologise. Taking accountability will assist in reviving their tarnished reputation as an effective regulator for the people.
5% are the conflicted Industy fund sales consultants in scaled drivel. Of course everyone is dissatisfied except for bloated over funded stupid asic. Also why scammers are winning and Australians can’t afford independent advice because of the costly red tape. Should be extradited
That 5%, who are supposedly satisfied with the government, will soon be assessed, mercifully.
Those advisers must be working for Industry Super.