Wolf in sheep’s clothing
The National Tax and Accountants’ Association’s scathing attack on the financial planning industry likely had ulterior motives.
THE ATTACK was swift and brutal. In a seemingly routine press release announcing a new staff member on Monday 22 July, the National Tax and Accountants’ Association (NTAA) levelled scorn at the entire financial planning industry, questioning its integrity in a tirade that would have made the Industry Super Network proud.
Warning consumers against seeking advice from “stranger” financial planners and staying within the secure relationship of the “one person people have learnt to trust with their financial affairs – their accountant”, the communication tarred all financial planners with an all-too-familiar brush.
Referring to the best interests duty introduced as part of the Future of Financial Advice (FOFA) reforms, and reminding consumers of the Storm Financial case, the statement asks: “How can an industry be so bereft of integrity that the government has had to legislate that they act in their clients’ best interests?”
The deliberately misleading implication is that consumers should view Storm not as an isolated incident but as reflective of the broader planning market, and that prior to FOFA, advisers were all out to get their clients.
The story attracted more than 100 comments on ifa’s website, ifa.com.au – a vast majority of which voiced outrage and pointed, understandably, to the scores of accountants who have been found guilty of misdemeanours on a par with the sins of Storm.
The financial advice associations did not take the news lying down: “The NTAA’s comments are grossly offensive… and defame members of the financial planning profession,” Financial Planning Association chief executive Mark Rantall told ifa. Association of Financial Advisers chief Brad Fox said it was not “normal behaviour” for an industry association to “point score” off another in such a blatant attack.
Other commenters pointed out the increasingly heated verballing between the two financial services sectors – described by Coalition Senator Mathias Cormann as a “turf war” – as the mudslinging between representative groups reached fever pitch during the Tax Agent Services Act (TASA) negotiations.
Undoubtedly, there is hostility – both in the public arena and around water coolers across the country – between some segments of the financial planning and accounting industries as they increasingly compete for clients and come to terms with changes like the new tax agents’ registration regime for advisers and the end of the accountants’ exemption.
But a closer look at the NTAA suggests this particular organisation’s campaign against planners goes beyond mere piggy-backing on the frustration of its own members.
While the organisation repeatedly ignored ifa’s requests for an interview, several days after the initial release and the barrage of angry comments that followed, the NTAA issued a watery statement at 5pm on the Friday afternoon.
An unrepentant NTAA leadership said it was simply “expressing the view of its members” and reiterated its concerns about “unethical advisers”. The statement then went on, revealingly, to spruik its NTAA Advice service, billed as a tool to guide members “through the transition to giving advice under the requirements of the Corporations Act when licensed under an [AFSL].”
Behind the PR weasel words, this NTAA Advice service is effectively a for-profit dealer group – a fact confirmed by an email from the NTAA to members and leaked to ifa.
The almost-comical email spoke of a “blitzkrieg” on small accountants by the “financial planning empire” singling out AMP’s push into SMSFs. It then offered the antidote: “We have an AFSL which you can join for only $250 a month and which won’t require you to sell any product,” the email states.
Not only does it offer licensing services but an investment platform and partial RG146 training.
The email indicates a profit motive behind the attack. But whatever the NTAA’s reasoning, the PR campaign has arguably backfired. While the body’s leadership may initially have been happy with the publicity, it also attracted the ire of the shadow financial services minister for Australia.“Such a blanket attack on the professionalism of an entire industry … is reckless and irresponsible,” Senator Cormann told ifa. Let’s hope the Senator remembers the unprofessionalism of this body when it pens its next submission. «
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