Institutions should “get out” of financial advice given the raft of problems they have caused for both advisers and clients, argues AIOFP executive director Peter Johnston.
Speaking at the 14th annual Wraps, Platforms & Masterfunds conference in the Hunter Valley last week, Mr Johnston said the “instos of recent times” have caused a series of problems for advisers.
“[They] have really caused a lot of problems – cutting off their income streams, taking their clients away from them,” Mr Johnston said.
“I agree with Dr Hewson, I think the banks should get out of it,” he said, referring to comments by former Liberal leader Dr John Hewson earlier in the conference.
“I think [that’s] the reason why a lot of advisers are getting into the SMSF market is because they are tired of the banks controlling their income streams and controlling their clients,” he said.
Mr Johnston also said the scandals that have unfolded within the financial advice industry, while unfortunate for the public, “worked in the independents' favour”.
“The CBA thing with Financial Wisdom was unfortunate for the public, but I think it is very good for the independent sector of the marketplace,” Mr Johnston said.
“So thanks to the CBA, it has kind of eased the way for independents to fight back, and I think now we have seen so many advisers jumping out of the institutional advisory space, wanting to get their own licence, so I think this is a significant change.”
Mr Johnston also pointed the finger at former financial services minister and current Labor Party leader Bill Shorten saying he targeted the independent advice space through taking away their income streams.
“Shorten had an agenda – in fact, I know he did – against the independent market,” Mr Johnston said.
“They saw that the banks were probably a bit too strong to knock out of the way as competition to their industry super funds and [saw] the independents as a soft target,” he said.
“Therefore they tried to cut our income streams by saying platforms are financial products,” Mr Johnston said.
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