Speaking to ifa, FPA chief executive Dante de Gori said the royal commission, which the government announced it would establish on Thursday, will inevitably cause disruption to the industry given the breadth of the draft terms of reference.
“The threat of a royal commission has been going on for a long time, and the FPA has long held the position that it will probably disrupt current reform efforts,” he said.
“It’s going to be a negative for the industry unfortunately.”
Mr de Gori noted that the financial advice industry has been the subject of 54 separate inquiries and reviews since 2009, and that the royal commission should instead focus on areas of the financial services sector that haven’t yet been examined.
“I hope it will focus on areas previous commissions haven’t addressed. Financial planning has been put under the spotlight and responded with reforms, and government should let those be implemented rather than revisit them,” he said.
Mr de Gori noted the draft terms of reference specify that the royal commission is not required to investigate matters “to the extent that to do so might prejudice, compromise or duplicate another inquiry or investigation”, which could mean reforms already in the process of implementation may be left alone.
“The government seems to agree that the commission should focus on these unexplored areas, based off the terms of reference,” Mr de Gori said.
“We just want to ensure Australians continue to have access to high quality financial planning, and I’m hoping the good work financial planners are doing will continue. I encourage all planners to keep doing their job to the best of their ability.”
Part of my submission to this and I hope many advisers in risk will also be doing the same will be to question how the LIF came about which will be detrimental to customers.
I will be asking how the FPA and AFA could have acted impartially with the FSC, when the same FSC members are funding these bodies.
I will be asking why the FSC members chose to deliberately mislead parliament over the “churn issue” which proved to be false once they had supplied the industry data to ASIC after the LIF was passed.
You have to question why the FPA and AFA were not shouting for this data before the LIF was passed? They did however get compulsory membership (discounted of course for the FSC member advisers).
Good point. Clearly the FPA should act and end their relationship prior to being in the mud and entangled up with the Banks and the Royal Commission. It would only take one member, just one member to ask the question of the Royal Commission and the FPA’s name is tarnished.
Many members sadly are asking Is this the opinion of the FPA or the Banks? Did the Banks pay you Danti to say this indirectly via the professional partner program ? Unfortunately this will just be seen as an organization funded by the banks, as just trying to turn attention away from properly investigating Bank behaviour. Just because the FPA get’s money from Banks and gives Bank planners 10% of membership fees should not be a reason that the FPA should be asking that we turn the spot light off poor bank behaviour. Surely if they didn’t receive these payments we’d take there comments more seriously?
Good to see IFA reporting something positive about our wonderful FPA for once
Me thinks you’re a Bank CEO who paid the FPA for silence and forced staff to join to avoid an Enforceable Undertaking.
Agree Danti. One area must be the relationship between industry associations such as the FPA and the payments they receive from banks. How could or how successful would the the FPA be for example when it comes to lobbying for say Opt In to the Labor Government when they are getting payments from Banks ? How appropriate is supporting the current definition of independence when they are getting payments from AMP and the banks ? Are all their actions in members interest or consumers interest or are they just acting for the banks ? How appropriate is that the banks have a say in the policy formulation of the FPA when making submissions to treasury ? Also why doesn’t the FPA disclose these payments from banks separately ? It’s all very very smelly and the FPA is going to be dragged into the Royal Commission.
I wonder if the FPA has thought to set up a letter drop – for a consolidated response / report to the RC about know malfeasance within the industry fund sector – ie providing unqualified unlicensed advice to members through ISN “member consultants” for example. This should be a great lawyers picnic – and while we are at it – why do unions believe that they need to be having a say / operate these funds exactly – when so few of the contributors actually want to be involved with the union?
Anonymous, totally agree BUT you have missed one group that MUST be subject to this inquiry, MANAGEMENT who aid and hide – past and present – the practices that led to these inquiries. Only then will everyone believe in the results.
Totally agree. Rather than yet another inquiry focused on licensed financial advice, it is time to turn the focus onto unlicensed financial advice from accountants, real estate agents, mortgage brokers and “journalists”. This is where the greatest consumer harm is now occurring.