“Like some aspects of FOFA and product failure, the advisers have been blamed for the shortcomings of other market stakeholders. This is yet another lesson to the independent sector that we cannot afford to allow these institutionally-aligned/sympathising associations to represent us with the regulators or government,” AIOFP executive director Peter Johnston said.
Mr Johnston said further that he had contacted some key independent senators about supporting the suggested amendments, with senior Liberal MPs expressing concern that advisers were not fully consulted.
In an email to AIOFP members – and following a previous email last week – Mr Johnston said the proposal the association is presenting will have the blessing of advisers before it is taken to Mr Frydenberg.
Mr Johnston emphasised this is something the proposal agreed to by other associations did not have.
“We will distribute it to all members. This is in contrast to the FSC, FPA and the AFA submissions which have yet to see the light of day to the best of our knowledge,” he said.
“What has become painfully obvious is that the proposal could not have been constructed in serious consultation with any advisers, no one regardless of their market origin would have agreed to the changes.”
Responding to Mr Johnston, AFA chief executive Brad fox told ifa it is “very easy to criticise the AFA and FPA for being involved” in the process.
“The fact that the AFA and the FPA could come up with a joint, shared, identical blueprint that was taken to the FSC and to [Mr Frydenberg] helped enormously in getting that final outcome,” he said.
“Things were considerably worse before that, so by us coming together, united, was a very beneficial part of this process.”
Mr Johnston said the three associations may have “superficially consulted” advisers but added that this did not go far enough.
“All they have done is insulted them with draconian institutionally-focused amendments, with little regard for consumers or advisers,” he said.
Mr Fox also acknowledged that had the AIOFP joined the AFA and the FPA in its discussions it would have helped the cause.
“The more voices you have uniting behind one point the better the result,” he said.
“We have seen through the last five years with FOFA that the advice market has been divided and others have been able to divide us on points which ultimately include outcomes that we aren’t particularly satisfied on.
“The more we can be united on things that have the greater good at the heart of the outcomes – so in other words, the consumer needs to benefit – well, then the advice benefits and then the providers of advice benefit,” Mr Fox said.
The FPA and FSC were unavailable for comment.
[quote name=”Nigel”]I’m not sure what went on behind closed doors but I have been led to believe that if the AFA and FPA weren’t at the negotiating table the outcomes would have been closer to Trowbridge (level commissions only etc) – and worse than what was received – only what I hear. Good to see a further proposal though – I hope it helps. Only thing is you have to have own AFSL I think to join AIOFP?[/quote]
AFA commissioned the Trowbridge report! So AFA had to agree to something they didn’t like (after publicly claiming they did in professional planner) because the minister said they only had weeks and something they commissioned earlier had even worse recommendations in it.
As if the liberal govt would go ahead with the reforms and make under insurance worse and reduce competition if we fought hard including in the media. If frydenberg thinks there is a consensus it’s a different story. If EVERYONE is perceived to be on the same page why not endorse it?
Still far from perfect, but its getting there.
Im ok with a lower upfront commission and a higher trail.
The clawback is still the issue.
Some products are a cancel and replace by the manufacturer. A new application must be done and must be fully underwritten.
However if done within 2 years with the same insurer there may still a clawback component.
Now lets say the premium cost is less. The trail is also less. So I lose twice.
Im working for free, but Ive had to do all that work.
Im sure the BDMs and everyone else up the insurer food chain is paid a new policy bonus/ income.
Ive said it once, il say it again.
FOFAs ‘best interest of the client’ has been replaced by the FSC and FPA best interest of the insurer’!!!
Peter well said and done I hope its not too late, now the AFA?FPA are emailing all members and even ex members who have resigned from them trying to justify the huge payments received from the banks when it was made compulsory by the FSC for all IFAs to be a member of there associations.
Peter send a membership form to us we would be proud to join your organization. And to all the advisers out there not making any noise Wakeup this is our industry and Future you need to do your bit.
Fox, keep the squirm mate. You rolled over on the IFA’s stop your patronising us.”It could have been worse” is a weak cop-out. It could also be better except this whole farce has been manipulated by the providers and you didnt stand tough.
I’m not sure what went on behind closed doors but I have been led to believe that if the AFA and FPA weren’t at the negotiating table the outcomes would have been closer to Trowbridge (level commissions only etc) – and worse than what was received – only what I hear. Good to see a further proposal though – I hope it helps. Only thing is you have to have own AFSL I think to join AIOFP?
[quote name=”Mark Harris”]Thank God we have one organisation that is prepared to fight for the IFA’s, well done Peter. The FPA & AFA have sold us out, time all the IFA’s cancelled their memberships and join the AIOFP.[/quote]
My concern is that they are finally starting the fight FAR too late. Being more active and giving advisers a voice in the previous proceedings would have been a lot better, as opposed to doing very little, waiting until it is too late, and then acting indignant after the fact. 🙁
Mr Fox – if you are so proud of the work you did on the Trowbridge submission, then release it publicly – just so we can all be proud.
Thankyou for supporting us when no one else will
FPA & IFA directors should be ashamed. Their obvious disregard for both their advisers, that they are meant to represent, and the general consumer begs belief. they have made it very clear they are puppets for the major institutions and always have been. I saw the writing on the wall many years ago and hence never have or ever would be a member of either. Shame on them for selling out their members so shamelessly. Good on you Peter well done.
Thank God we have one organisation that is prepared to fight for the IFA’s, well done Peter. The FPA & AFA have sold us out, time all the IFA’s cancelled their memberships and join the AIOFP.
well said Peter
I am sorry to say this but if the AFA/FPA had any kahunas they would have PUBLICLY AND LOUDLY abandoned the negotiations the moment the banks got their way with the three year clawback.
I defy the AFA & FPA to conduct a poll of their members to ascertain if any adviser is prepared to accept the draconian 3 year clawback that even Trowbridge thought was unfair to advisers.
And risk advisers were not consulted in any meaningful manner during the negotiations. The FSC has still not revealed its submission publicly
The AFA/FPA appear to be taking the clawback lying down. Well I have news for them, this will not go away and thanks to Mr Johnston we are fighting back.
And I am re-considering my AFA membership !!!
Great to see someone independent supporting Advisers.
Comments from Brad Fox “The fact that the AFA and the FPA could come up with a joint, shared, identical blueprint that was taken to the FSC and to [Mr Frydenberg] helped enormously in getting that final outcome,” he said.
Clearly highlights the fact that they are puppets to the large institutions and product manufacturers as both have too much to lose in memberships to go against them
How did the FPA/AFA come to the same outcome?? this really smells!
I was willing to give AFA the benefit of the doubt over the insurance remuneration cave in. But I notice AFA has made another announcement recently about a partnership with Christopher Zinn’s latest moneyspinner. This seems entirely inappropriate given that Christopher Zinn’s lies and misinformation while at Choice were instrumaental in eroding public trust in financial planners.
For AFA to get involved with him shows extraordinary lack of judgement, and now makes me wonder about their competence and judgement when they caved to the FSC on insurance remuneration.