Speaking at the AFA roadshow in Sydney, chief operating officer Phil Anderson said the AFA and FPA received little support from the industry to ensure a better outcome for advisers.
“We [did not have] an alliance of parties coming to support a better outcome,” Mr Anderson said.
“[During] the FOFA debate we had the Coalition on our side [and] we also had the FSC on our side.
“This time around the advice associations had the support of some of the independent licensees, who spoke out in support of the retention of a [80/20] hybrid model and other arrangements.”
Mr Anderson did acknowledge, however, that some of the life insurers “actively lobbied to get the right outcome” for the best interests of both consumers and their advisers.
There were parties calling for greater changes than the ones proposed by Assistant Treasurer Josh Frydenberg, he said.
“[For example] consumer groups – some of the consumer groups want no commissions at all. They are not thinking about issues like underinsurance or access to advice.
“The FSC was clearly on the other side of the debate and probably a majority of the life insurers were on the other side of this debate.
“Both sides of politics were [also] absolutely determined that there would be significant change.”
Mr Anderson added that while the AFA and FPA fought to obtain a better outcome for advisers, when faced with the alternatives of the FSI recommendations and the proposals of the Trowbridge Report, they are much better off.
“The retention of the existing hybrid model, that is what we wanted,” he said.
“But I guess [where we have landed] is better than Trowbridge and is significantly better than level commissions only.”
Over the weekend the inability of multiple countries to reach an Asia Pacific trade deal demonstrated the challenges of multi-party negotiations. If a negotiating party comes in with a “my way or the highway” approach they will either not get invited in the first place or get freezed out in the room.
The AFA and FPA had the challenging task of coming into a multi-party negotiation on behalf of advisers and consumers. Commentary over recent weeks suggests that other parties think they could have done better, and convinced everyone else to take their solution without any material compromise. Does anyone seriously believe that?
I’m suggesting rather than calling for a brand new negotiation and the fantasy of a different outcome get behind the FPA and AFA to take common sense refinements to the government, but within the integrity of the existing negotiation. Get behind them to also help lead breakthrough productivity ideas and hold the insurers to account for specific, tangible benefits to customers vs. generalisations.