Adviser practice values have plummeted and the mental health of financial advisers has been impacted by FASEA, according to the AIOFP.
The association’s executive director Peter Johnston told ifa that FASEA is a “bureaucratic indecisive disaster that is destroying the industry”.
“The ongoing FASEA/FPA fiasco has all the hallmarks of political trickery where advisers have been duped into believing their world is going to end with ridiculous proposals then the ‘white knight comes in to save the day’,” Mr Johnston said.
“In the meantime, adviser practice values have plummeted, stress levels immeasurably increased and family life disrupted by the unfortunate behaviour of some FASEA board members and their industry allies.”
Mr Johnston said the trauma to the industry could have been avoided.
“To viciously play with adviser practice values, livelihoods and mental health is unforgivable,” he said.
The AIOFP supports the recently released FASEA recommendations from the FPA, Mr Johnston said, adding that the association agrees with any suggestion to mitigate the FASEA circumstances.
However, he added that the FPA’s recommendations do not go far enough.
“The recent criticism in the royal commission around direct life insurance repugnant selling practices strongly suggests we need to wind back the LIF legislation and respect the critical role risk advisers play in the market,” he said.
“This should therefore be reflected in FASEA with the need for risk advisers to have a degree be abolished, a risk focused diploma is sufficient and they must pass an open book ethics and legal obligations exam relevant to their profession.”
The AIFOP believes market experience also needs to be acknowledged. Mr Johnston said advisers with over 20 years' experience should be given 10 years from the original date to exit the industry, as long as they pass a legal and ethics exam that is relevant to the industry.
“Considering the time wasted over the past 18 months with indecision and bureaucracy, the legislated deadline of 2024 needs to be amended to satisfy the conditions. Advisers who are only PS146 compliant will have great difficulty operating a practice, maintaining a family/leisure life and then study full time,” he said.
“FASEA is a bureaucratic indecisive disaster that is destroying the industry. The minister should not be waiting until next April to terminate certain board members, he needs to immediately terminate the entire board, amend the legislation and recalibrate the process.
“Furthermore, associations that actually represent advisers not conflicted universities and/or institutions should be consulted to balance the perspective.”
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