AFA raises IFA hardship in FSI submission
The Association of Financial Advisers has urged the Financial System Inquiry (FSI) to investigate the financial challenges of non-aligned advisers running their own licence.
>In its submission to the FSI, the AFA notes that the FOFA reforms and the ban on volume-based rebates have made the financial aspects of running a licensee increasingly challenging.
“As the same financial pressures do not apply to institutionally-owned, vertically-integrated groups, there will be increasing pressure on the independent licensees,” it said.
“The impact of grandfathering will progressively reduce over time, and the training and education exemption is ineffective as it is based upon the product partners paying the third-party suppliers directly rather than providing funding to licensees in support of training and education events more broadly.
“We believe that this is one area where further refinements can be made to level the playing field for independent licensees with the result of more competition at the licensee level.”
The AFA requests that the FSI investigates these two cases where the impacts of FOFA have put the continuation of important sectors of the market at risk.
In addition, the AFA called for further clarity on the status of corporate superannuation advisers as well as for authorised representative advice businesses to be exempt from state payroll tax.