Financial advisers are bracing for a poll showdown between current PM Scott Morrison and PM hopeful Anthony Albanese as the two officially kick off their campaigns in the lead up to the 21 May vote.
The executive director of the Association of Independently Owned Financial Professionals (AIOFP) labelled May’s vote as the most important in financial services history.
“Do we stay with what we have experienced over the past eight years or put our faith in a new ALP government? The sporting parlance is look at the score board and if you do not like what you see, look at the other option,” Peter Johnston said in a written response to the ifa.
The Advisers Association CEO Neil Macdonald said regardless of who wins the election next month, the advice industry requires a “consumer-focused, bipartisan approach” following a great deal of change to compliance and regulation in recent years.
Speaking to the ifa, Mr Macdonald said the government must provide “better treatment” of Australian financial advisers so they can continue servicing clients and consumers, particularly now so more than ever with an estimated 250,000 people retiring every year.
“The financial advisers that remain in the profession are required to pass a demanding exam and meet more onerous higher education requirements. They are required to abide by a Code of Ethics and the Best Interests Duty. They are also dealing with the impact of the removal of grandfathered commissions and the move to annual advice agreements.
“Advisers and, importantly, their clients, need certainty that all this change is given the time it needs to settle in, without fear that more change is in the wind,” Mr Macdonald said.
“We would also hope that the reviews that are currently underway are concluded in a timely manner, that they address the improvements necessary and that issues are identified promptly and addressed in a cost-effective and efficient way.”
Mr Macdonald added that he hopes the incoming government will also look at the introduction of the Compensation Scheme of Last Resort (CSLR) legislation which was recommended to be passed by the Senate economic committee in February.
Mr Macdonald told ifa that he has serious concerns about the legislation which aims to provide limited compensation where a determination issued by the Australian Financial Complaints Authority (AFCA) that relates to a financial product or service remains unpaid.
“… we believe unfairly places yet another significant financial burden on the shoulders of financial advisers for very little consumer benefit, and we would hope that the incoming government takes the opportunity to pause and reflect on it.”
Meanwhile, the Association of Financial Advisers (AFA) CEO Phil Anderson predicted that any major changes for the industry, including the CSLR, will not be addressed until post-election.
“The government has now gone into caretaker mode, which means that outstanding legislation such as the Compensation Scheme of Last Resort, and other regulatory reform, such as the proposed change to the education standard, will need to wait until after the election to be resolved,” he told the ifa.
“We are not expecting any major announcements on financial advice policy during the course of the election campaign, as we expect that both parties are going to rely upon the Quality of Advice Review [to be released in December] to drive the agenda for fixing the issues in financial advice and making financial advice more accessible and affordable.
“We look forward to Australia deciding on the new government and we will seek to work closely with whichever side of politics wins the election and forms government.”
Similarly, the FPA too is eager to work collaboratively with whoever forms government on the many issues that are important to their members.
“This election provides a great opportunity for financial planners to advocate for, and to evaluate the plans of the major parties for a sustainable future for our profession,” Sarah Abood, CEO of the FPA, told the ifa.
“There are a number of challenges facing financial planning in Australia. We are dealing with multiple standards and regulations being applied on top of an already complex regulatory framework that has evolved over many years. It’s critical that any future government should prioritise and support the reviews already in train, that are assessing their impact on the long-term viability of the financial planning profession and making recommendations for change,” Ms Abood said.
The FPA confirmed it will soon be releasing the policy priorities it, in consultation with its members, believes must be addressed in the next term of government.
Clowns to the left of me, jokers to the right.
“Here I am stuck in the middle with you….”
Neither Scott Morrison or Josh Frydenberg have any appetite whatsoever in regard to financial advisers and financial services.
They are so removed, so blatantly and
deliberately negligent to any concern regarding the destruction of small business and an industry, it is simply not of any concern to either of them whatsoever.
They have abandoned this business in the most negligent manner possible and they have no conscience at all.
As long as their faith carries them through every week to ensure they believe in themselves and believe they are doing good for all, then we are effectively finished.
They may well ask for forgiveness, but they bloody well won’t get it from financial advisers who have been broken & busted by their
relentlessly discriminatory Govt.
So Anthony Albanese’s new partner, Jodie Haydon is a strategic partnership manager with an Industry Super Fund!!
You can’t get much more “ strategic “ than that
regarding a conflict of interest when it comes to making decisions regarding independent financial advisers!!!!!
Think this could breach FASEA Standard #3
FASEA Standards don’t apply to product providers.
Laws don’t apply to union (aka “Industry”) super funds.
If you are a Financial Adviser, it seems you can be punished by the regulator as if a practitioner was a member of a profession.
Is it fair however to suggest that outside of punishment, the Financial Advice community is not treated in similar professional esteem particularly with regard to its legislative framework?
One another note;
Could one argue that political connections between superannuation product providers and political legislators are arguably an extension of “Vertical Integration?”
Those of you that are going to vote for the LNP again are suffering from Stockholm syndrome.
That is so CORRECT !!!!!
So its Stockholm Syndrome vs the Labor/Green Lobotomy?
It is the Liberal government which now makes me pay circa $5,000 in an ASIC tax.
It is a Liberal government that made me, my trading business and my AFSL holding business all pay to be members of the TPB.
It is the Liberal government which wants a compensation scheme of last resort to EXCLUDE product manufacturers.
It is the Liberal government which made me sit the adviser exam – an utterly useless test of financial planning ability.
It is the Liberal government which wants super funds to check my SOA’s before making payment to me.
It is the Liberal government that brought in annual opt-ins.
It is the liberal government which brought in degree requirements even for people with 20+ years of experience.
How anyone can vote Liberal is beyond me. Akin to the turkey voting for Christmas.
Would you rather work at a industry/union fund instead?
It is the labor government alluding to the elimination of commissions. Better the devil we know perhaps.
The only issue is the ALP is worse. Financial Planning is screwed either way.
it was Labour who brought in FOFA.
It was labour who introduced intra fund advice.
It was labour who wanted to ban all commissions.
It was labour who said hairdressers more qualified than financial planners.
It was Labour who called for the royal commission and before they read the report said they would implement all recommendations.
If you think labour are for advisers then you have eaten the turkey for xmas.
As reliable as an ABC fact check.
What exactly was wrong with FOFA?
Shorten specifically grandfathered commissions; it was the Liberals which wiped them out.
It was the Liberals which massively reduced life insurance commissions.
And the reality was, hairdressers were more qualified; FP’s needed a 4 unit diploma (with open book exams), they needed a multi-year apprenticeship.
“How anyone can vote Liberal is beyond me.”? It’s not that hard because most don’t care about your lot in life, of the financial planning industry. They vote how they want to vote based on their needs or beliefs. And it’s easy to vote for the LNP. Just put a “1” in the box next to the candidate in the House of Representatives ballot (then 2, 3 onwards against the other candidates, then on the Senate ballot a “1” above the line above the Liberal candidates. If you need any help voting, let us all know.
No it isn’t. Neither will change anything to do with Financial Planning.
Any one that works or has a connection to the Financial Plannnig industry would have to have rocks in their head to vote Labor. Myself and my staff are not quite ready to work at AwareSuper in a call centre yet. Labor Ministers don’t decide Financial Planning policy, Union dominated Super funds decide Financial Planning regulation. I cannot risk my business, my staff’s careers being wiped out by Labor just because a competitor being a Super fund wants to get rid of me.
Couldn’t agree more.
I will vote Liberal as will the majority of our advisers.
Things were much better under Shorten and Bowen than they have been under Frydenberg, Dwyer and Hume.
Hume and the coalition must be held accountable. I’ll vote Labor, like many other advisers intend to do. Hopefully the coalition will come to their senses in opposition and come back better. In the meantime there is nothing Labor can do to harm me that hasn’t already been done. Scrapping commissions? Unlikely to happen, but life insurance is broken anyway. CSLR? The coalition will do it anyway. Free kicks for industry funds? Yeah they will do that. I honestly don’t care anymore.
Spot on Jamberoo. Of course Labor will favour union funds, but the Libs have inexplicably been giving union funds a free pass for years anyway. The misleading and deceptive advertising used by union funds started in the Howard era and he did absolutely nothing to stop it. Nor did any other Liberal govt since.
As you say, it couldn’t possibly be worse under Labor, and maybe some time in opposition will finally bring the Libs to their senses.
The small number of Libs who have shown interest in highlighting the conflicts and inappropriate practices of union (aka “Industry”) funds might actually be more effective doing so when Labor is in government. I look forward to a more concerted attack by Wilson, Bragg and Falinski from the opposition benches.
Neither party want to fund ASIC, therefore we are stuck with a regulator so conflicted and influenced by its need to raise its own funding (dare I say greed) that it will take each and every opportunity to fine and discredit the advice industry, while protecting the industry funds and banks.
You can say “unadulterated greed ‘ if you like…
Neither the LNP nor Labor are going to improve this industry so that CONSUMERS are better placed to access affordable advice. Seriously – what is not to understand ? The industry is utterly broken – for advisers and consumers.
A vote for independents is a vote for labor and the greens no thanks…
Yeah not sure on that. Having met the Independent standing in Wannon (and previously having the same doubts), I am now convinced there are candidates out there willing to listen and act on concerns from the electorate. This guy in particular brings no party baggage and sits firmly in the centre. Also useful to remember some of these Independents left previous involvements (both LNP and Labor) because they disagreed with them, therefore would not necessarily still vote with them. Nothing will get done without Independents pushing local agendas.
Depends which Independent. For many of them it will effectively be a vote for LNP. It ultimately depends on who they preference. Either way though, voting Independent is a wasted vote for anyone concerned about financial advice regulation. It’s a low priority issue for the Independents, and with limited resources and bandwidth they are more likely to be guided by ABC/Fairfax hysteria than make any effort to understand the facts.
Damned if we do and Damned if we don’t…How does one decide between two extrememly poor choices?
Vote the independants in, maybe they can keep whoevers in charge, honest.
I really agree with you on this one. So difficult looking at these choices. Nobody cares about this industry but us and our clients really.
It is great spending all this time and money investing in a Masters Degree with huge uncertainty worrying if I’ll still have a job in two years.
I don’t trust either political party to manage the profession moving forward. I find it quite odd that advisers are told they are poor managers of conflict, yet those who control the pathway forward in my opinion appear even more conflicted.
Relationships between product providers and legislators are not favourable. I don’t have confidence that such conflicts will be managed well. I’ll wait and see but I’m really pessimistic about where this’ll go.