Peter Johnston, executive director of the Association of Independently Owned Financial Professional (AIOFP), has outlined a number of short-term issues that the incoming government must address, including the “compliance regime”.
On a upcoming episode of the ifa Show podcast, Mr Johnston said the compliance situation needs to be rationalised, following a wave of reforms over the last few years, particularly in the last 12 months.
“Minimum 50 per cent needs to be wiped out,” Mr Johnston said.
“It could be done in a day. It doesn’t have to go on for months and months and months with bureaucrats. It should be people from the industry – people from AFCA representing consumers and people from ASIC. They could sit in a room in an afternoon and point out all the stuff which is just ridiculously useless and just get rid of it.”
Mr Johnston said the AIOFP will also be urging the government and shadow financial services minister Stephen Jones to fix the “cliff” facing thousands of advisers who are yet to pass the financial adviser exam.
“These people, if they don’t pass by 1 September, they’re actually kicked out of the industry, which would be a tragedy,” he said.
Mr Johnston said that the AIOFP has raised this concern with Mr Jones who agreed that the issue needed to be addressed.
It comes after Mr Johnston slammed the outgoing Morrison government following the election loss this month for its “unfairly harsh” treatment of advisers.
“We hope future governments will think twice before trying to politically victimise our community again,” he said.
Speaking on a recent webinar hosted by Stockbrokers and Investment Advisers Association (SIAA), Mr Jones doubled down on his earlier commitment to fix the “hot mess” that is the advice industry by introducing an ‘experience pathway’.
“We want to put in place a sensible, efficient recognition of prior learning arrangement so that if you’ve been doing the job for ten years, you can continue to be a licensed adviser provided you haven’t got any black marks,” Mr Jones said.
He assured that if appointed, Labor “should be able to” enact the experience pathway “pretty quickly”.
Listen to the full podcast with Mr Johnston here.
READ MORE: Advice industry can’t unite until ‘ridiculous’ number of associations is cut down
So far Peter and his team have done more for financial advisers than the FPA, AFA, PIFA, and every other lecherous group. THANK YOU PETER!
1. Remove FDSes: They provide no protection to consumers and consumers DON’T WANT THEM.
2. Remove Opt-Ins: They provide no protection to consumers and consumers DON’T WANT THEM.
3. Remove SoAs and replace them with RoAs: SoAs provide no protection nor value-add to consumers and consumers DON’T WANT THEM.
4. Change ASIC: If ASIC expect certain designs and wording in documents the onus should be on them to provide these in simple, easy to follow & use templates. The number of Adviser who’ve been slapped or banned for using documents that show everything we’re required to but not in the format that ASIC apparently want is appalling. It’s time they’re held accountable.
5. ASIC analysts & delegates should have industry related and specific experience of greater than 10 years before they’re able to determine whether advice is good, appropriate or not. It shouldn’t be a case of those who can’t do, teach/regulate.
6. The government and regulators should look at how other markets around the world work and “advise”.
7. The government and regulators should actually CONSULT with consumers to see what they want, how they want it and why they want it. Don’t just make it all up. Don’t have lawyers making the rules. Don’t have public servant nonces making the rules.
Sorry never going to happen, there is far too much common sense in the approach, and we all know sense isn’t very common in the government or regulators.
Compliance needs to be fixed but that is only possible if we set a benchmark minimum, which is passing the FASEA exam even though it is a ridiculous exam. I really don’t see why people have sympathy for those that haven’t done what is a simple if not misguided exam.
“It could be done in a day”… Yes we all know that Peter except the beauracrats would first need a workshop to debate which day it should be held on followed by the forming of a sub committee to determine how and when that day should play out. So sometime before 2025 looks good. Meanwhile the endless frustration continues in planner land but thanks for being yet another FP association with a good idea. Have you guys started talking with each other yet #Unitedworksbetter as it seems you are all firing bullets at the new government independently of each other?
Unfortunately it is deeply ingrained in bureaucrats and academics to complicate and over analyse.
It is blueprinted within them to challenge common sense and simplicity and to then drag things out, “ brainstorming “, philosophising, debating and then disagreeing and arguing.
There is an unfortunate mentality within academics that because they are qualified and intelligent people that others cannot and must not contribute at their level.
This has been the pre-eminent issue regarding the ethics debate previously when academics with absolutely no experience whatsoever were paid to provide their opinion on how the ethics of financial advice delivery should be.
This resulted in ridiculously unworkable sections of the FASEA Code of Ethics because the people involved had no real world experience.
The other major issue is that a large majority of bureaucrats & academics are Labor voters, Green voters or Independent voters.
None of these political groups have traditionally had an affinity with private small business owners in the financial services sector.
The bureaucrats & academics understanding of what financial advisers do day to day is almost non existent.
…and yet, they are sought to provide guidance and foundation for irrelevant, unworkable, unprofitable and unrelenting regulation.
They are asking the wrong people and getting the wrong answers.
Fine, look at the red tape but let’s not forget that a lot of the read tape was caused by multiple levels of the industry and their practices over a long period. There are a whole lot of arguments around this and far too many for little comments panels.
But as for the exam. JUST DO IT. If you’ve been hanging around waiting for some industry body or a politician to make you a special case not to have to take it and pass it, as thousands have already done, then perhaps the problem is not the exam.
“It could be done in a day. It doesn’t have to go on for months and months and months with bureaucrats. It should be people from the industry – people from AFCA representing consumers and people from ASIC. They could sit in a room in an afternoon and point out all the stuff which is just ridiculously useless and just get rid of it.”
Most all advisers would agree – the difficulty is getting these organisation to agree to shed the associated budget and jobs associated with these rationalisations. You’d need an ethics expert in the mix to keep them honest and ethical!
But only if the ethical expert was himself ethical. If you used an unethical ethicist who makes money from ethics training you might end up with everyone being forced to pay for another ethics course regardless of how much ethics training they have already done, then pay for lots of ongoing CPD in ethics. You might even be forced to do more mandatory CPD in ethics than in constantly changing areas like superannuation or investments or tax! How Orwellian would that be?
I said to a 65 year old recently it’s not that I don’t want to help you, with the second or third decision of your life, it’s just to talk to you we need to consider/do/complete, the following and that’s involves an FSG, ROA, SOA, FASEA codes, Privacy, TOE, LOA, AFCA, ASIC, AML/CTF, PI Cover, PDS, TMD, the FPA or AFA and the TPB and importantly a range of ASIC RG’s and the FDS..so have you considered Tik Tok?
How is it we can spend thousands of dollars giving away tax payers money to multiple Australian Universities to have Australian Academics prove that [u]human lead ongoing advice [/u]provides a higher level of financial well being to all walks of life, compared to no advice, once off advice via a Union Super fund, or even Joe Bloe. Yet we have a regulator that wants to eliminate us. We have a Treasury that doesn’t follow that Tax Payer Funded Independent Academic Research? me no understando.
Whats “TIK-TOK” short for?:lol:
“bad advice”
ASIC is the primary problem. Treasury and APRA are secondary problems.
All are useless government bureaucracies.
. . . [i]and we pay them[/i][b][/b], don’t forget THAT little pearler. Classic insult to injury right there! [b]We pay their weekly paypacket, their super, their holidays, their overseas junkets, their golden handshakes to the execs et al. [/b]Yep, all for putting in the foundations to destroy our small businesses and our once-magnificent industry and leave Australians without quality, easy to access affordable financial and risk insurance advice. They destroy all that and we PAY THEM HANDSOMELY TO DO IT!!! You couldn’t even make this stuff up even with Aldous Huxley to help you! Beyond immoral and disgusting . . .
I agree about the ridiculous red tape. I don’t agree re the examination. If you cannot pass it (by now) then perhaps another line of work would make sense.
Working for a Product Provider giving General Advice OK with you?
plenty are doing it