Reflecting on his decision to “ask hard questions of the FPA in recent times” – culminating in the publication of an open letter to FPA chair Matthew Rowe – Mr Johnston told ifa that he holds the FPA largely responsible for not stopping the “independently-owned sector” from becoming the “disadvantaged party” in the negotiations leading to the enactment of FOFA in 2013.
“The ALP government eventually chose to deal with the FPA, and not others, on mainstream financial advice matters,” Mr Johnston said.
“What did the independently-owned sector get at the FOFA table which was represented by the FPA? We got a ridiculous and highly discriminatory decision that accepting an administration profit share of say 20 per cent share from an institution’s platform was conflicted remuneration when [SMSFs and vertically integrated models] can take 100 per cent of the administration fee to cross subsidise practice infrastructure and not be considered conflicted.”
Mr Johnston said that while SMSF specialists and risk specialists were represented in the FOFA negotiations – by SPAA and the AFA respectively – the “independently-owned sector” was not able to lobby against this element of the FOFA legislation as “commercial and political reality dictates that the FPA had no choice but to act in the best interests of the majority of their members”.
Describing this outcome as “the greatest travesty of justice and Machiavellian moment in the industry’s history”, Mr Johnston also called for a new approach to the governance of industry associations which mandates segmented membership.
“The government and regulators may think they are dealing with a body representing the entire industry only to find the opinions and proposed solutions only suit a specific sector,” he said.
“To create and maintain a level industry playing field going forward, there should only be member-homologous associations.”
https://www.youtube.com/watch?…
AIOFP….out of obscurity and into irrelevance in one giant leap.
That is a lovely piece FPA Supporter.
The behaviour of Peter Johnston can only make me think of this quote;
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.
Theodore Roosevelt, “Man in the Arena” Speech given April 23, 1910
26th president of US (1858 – 1919)
AIOFP Trio Astarra Shawn Richard
Lest we forget
Danny
you really should get across the process or admit to being part of the problem. We are about to go through the same issue again of a group being formed to resolve the form of a register for financial advisers. The funding of political lobbying in Australia in all areas is skewing the outcomes. It happened with FOFA and will happen again if we let it. Self interest of institutions will promote money being spent to reinforce their views in Canberra. FPA/ISN are both part of that same self interest juggernaut. The rest of us simply can;t spend the money they can to haev out voices heard. That is why the AIOFP, and many others, were not at the table last time, not because they didn’t want to be.
Steve
with all due respect, I don’t know if you have the evidence to support your contention “Most advisers….. etc”. Personally, I support the FPA and know that many others do. The above article just seems to be a whinge by the AIOFP about not being able to continue to build it’s volume bonus on an inferior badged platform. Hard to see how this is moving our profession forward.
Danny, most advisors agree with his views. Most advisors can see the damage the FPA has done. Most advisers would rather not be an FPA member. The FPA has done a great job at destroying its credibility by destroying this industry for its own gain.
Mr Johnston (and those who pay good money to be a part of his “association”) probably needs to ask himself why AIOFP was not at the negotiating table alongside SPAA, AFA and FPA. Were they not asked or couldn’t they be bothered?
These ridiculous bleatings further demonstrate the irrelevance of the AIOFP